ORAL ANSWERS TO QUESTIONS

TREASURY

The Chancellor of the Exchequer was asked-

Financial Sector

Linda Gilroy: What steps he is taking to protect the economy from the effects of excessive risk-taking in the financial sector.

Alistair Darling: Reform is necessary at domestic, European and international level to ensure that we have a regulatory system that can effectively monitor and, where necessary, curb risk-taking in the financial services sector.

Linda Gilroy: I thank my right hon. Friend for that reply. On the use of regulatory tools, has he noticed that commentators increasingly suggest that a more equal society is a more effective and efficient society? Will he use those tools to bear down on the very high incomes that we still see particularly in the banking sector?

Alistair Darling: I agree with my hon. Friend that it is important that we have a fair and just society; that we ensure that, when people are rewarded, they are rewarded for their effort; and, in the banking industry in particular, that the relationship between what somebody does and what they get should be better aligned. That is why we received the agreement of the G20 countries and imposed restrictions on what the banks in which we have shareholdings can do. I hope that over the next short period, banks in this country and others remember that they live in the same world as the rest of us. They ought to show restraint at a time when everybody else is having to pull in their belts.

Peter Tapsell: As the measures already announced by the British and European Governments are widely seen as being inadequate "to stop the second shoe falling", will the Chancellor do his best to persuade the Financial Stability Board and the European Central Bank to embrace as many as possible of the proposals in the Volcker plan, so that we can have genuinely international bank reform?

Alistair Darling: I agree with the hon. Gentleman that global agreement on the reforms that we need is highly desirable. The proposals that the United States made 10 days ago, the requirements for increased capital, where necessary, to ensure that the amount of capital held is commensurate with the risk undertaken, and the measures to take forward the work on resolution plans-living wills, if you like-are all very important. They represent a common objective. For the reasons that I explained earlier, I do not take the same view of the proposal that might come from the United States on breaking up large banks. The real problem is the interconnectivity of institutions, and we need reforms on that. However, I certainly agree with the hon. Gentleman that, importantly, regulation in Europe and in the United States should move forward together, and that is one of the things that I shall raise at the G7 Ministers' meeting in Canada this weekend.

Dari Taylor: Is it not the case that banks that mainly handle hedge funds are seen by many as casino banks? Is it not time that we looked at that world of hedge funds and separated their activity in banking terms from that of banks that handle everyday mortgage and saving-that is domestic-needs?

Alistair Darling: I do not think that the division that my hon. Friend provides is quite as simple as that. Hedge funds can perform a useful function, but it is important to ensure that, when banks engage in risky activity, they have sufficient capital behind them if things go wrong. That is why we are very happy to work with some of the proposals from the United States and, indeed, other parts of the world. Most people recognise that the situation is quite complex, and I see that the Opposition have now shifted their position from warmly embracing the break-up of banks to an assurance, which the shadow Chancellor gave to bankers at the weekend in Davos, that they would not do any such thing.

Vincent Cable: The Chancellor and I have agreed to differ on the Government's rejection of the Governor of the Bank of England's advice on breaking up those banks, but now that the President of the United States has made the case that proprietary and, indeed, wider, own-account trading by banks is dangerous and must be separated from traditional banking, do the Government not wish to rethink their position at all?

Alistair Darling: Interestingly, if one looks at Paul Volcker's proposals, which he made as part of his Group of Thirty proposals a year ago, one finds that he recognised that proprietary trading could be risky and recommended that greater capital be held against such risky activities. We have expressed that view before, and the issue clearly needs to be looked at. However, we must also bear in mind that most British banks do not engage in that much proprietary trading, and it certainly was not the root cause of the recent problems.
	I say to the hon. Gentleman, as I have said to him before, that traditionally the regulatory system was modelled on the basis that if one firm was all right, the entire system was all right. Over the past 18 months or so, however, we have seen that we have to look behind that, because risks were laid off to institutions, which laid them off to further institutions. In some cases, we found that the first firm that had attempted to lay off its risk was buying it back through another part of the empire, without having any idea of what it was doing. The interconnections of financial institutions are the problem, and that is why the hon. Gentleman's proposals do not fit the bill. In fact, he is rather like a general fighting the last war rather than taking account of where we are likely to be in the future.

Vincent Cable: The Chancellor says that this is not the basic cause of the problems within the UK system. Is it not true, however, that there were enormous losses within the Royal Bank of Scotland, for example, as well as within the mortgage lenders? Is not the real reason why the Government-and, for that matter, the Conservatives-are not willing to go down this route the fact that they have been persuaded by the City, for its own self-interested reasons, to adopt this position of a level playing field? Whereas the Government took the world lead in the bank rescue operation, they are now lagging behind the rest of the world in dealing with this very dangerous problem.

Alistair Darling: No, I do not accept that. If the hon. Gentleman reflects on what has happened since 2007, he will see that the problems were partly to do with liquidity. For example, Northern Rock was totally dependent on wholesale funding, and when that dried up, the bank effectively collapsed. However, the other problem was that too many firms, such as RBS, clearly did not understand the extent to which they were exposed, and because of that they got into difficulties. That was a feature of many of the banks that failed. We need, first, to ensure that we have adequate capital that stands behind the banks' activities, and that that capital is commensurate with the nature of the operations. Secondly, we have to ensure that in the event of a bank getting into difficulties there is a resolution plan-a living will-whereby the regulators of the banks know exactly what needs to be done and who needs to be doing what.
	The crucial thing-this comes back to the point raised by the hon. Member for Louth and Horncastle (Sir Peter Tapsell)-is that it is necessary for us to ensure that the regulatory reforms are not just put in place here but done on a broad-based international basis. That is what we need, and it is in all our interests to ensure that it happens. Let us remember that at the end of the day we have to ensure that we have a robust regulatory system, but also a system that ensures that banks are there to provide credit for the economy, which is the objective of all the reforms that are being put in place.

George Osborne: The Chancellor is proving quite a defender of the old model of finance. The President of the United States did not say that he wanted a return to a full-scale Glass-Steagall approach and the break-up of the banks; he said that he wanted to separate retail deposit-taking from large-scale proprietary trading, large internal hedge funds, and large internal private equity funds. I agree with him, and I think that these things should be agreed internationally. Could the Chancellor explain very specifically why he disagrees with the President of the United States?

Alistair Darling: As I have said before, we have still to see the details of what the President is proposing; I understand that we will see more during the course of this week. I have to say to the hon. Gentleman that we are dealing with a complex set of proposals. On the day that the President made his announcement, according to Robert Peston-[Hon. Members: "Ah!"] Well, I am sure that he is right on this. Robert Peston said that the shadow Chancellor had told him
	"explicitly...that a Tory government would impose an identical dismantling of British banks to those suggested by President Obama."
	Yet on 28 January, in  The Wall Street Journal, the hon. Gentleman said:
	"I fully understand that modern universal banks need to offer their customers investment banking services"-
	in other words, a complete climbdown from the position that he had adopted only seven days earlier.

George Osborne: Let me make this clear to the Chancellor of the Exchequer. I agree wholeheartedly with the President of the United States that large-scale proprietary trading should not sit alongside retail deposit taking. If I were in the Chancellor's job, I would be trying to work on that internationally instead of opposing it.
	May I ask the Chancellor about something else that the President proposed in that speech? He said that he wanted a bank levy; and, of course, the Swedish Government have proposed a forward-looking insurance levy. At the Finance Ministers' meeting, the Prime Minister floated the idea of a Tobin tax, but the Governor of the Bank of England told the Treasury Committee:
	"I don't know anyone on the international circuit who is enthusiastic about it".
	Given that the Governor talks to the Chancellor a lot, presumably the Chancellor is included among those who are not enthusiastic about it. Can we take it that the Tobin tax idea is now completely dead?

Alistair Darling: On the hon. Gentleman's first point, I said that where there is common ground between us and those in the United States, we will work closely with them; that is something that I intend to pursue at the G7 meeting this weekend, along with other Finance Ministers. I do not accept the proposition that if we simply break up banks we will sort the problem that needs to be sorted, because of the connections between financial institutions. That needs to be got right. The hon. Gentleman-he is allowed to do this-has changed his mind over a period of all of seven days. Today he was promising a speech on a new economic model; it is clear that we get a new economic model from him every single day.
	International levies and an insurance fund are something worth looking at, and we will certainly work not only with the Americans but with other countries on that.

Unsecured Loans

Bob Spink: If he will take steps to provide greater protection to people who take unsecured loans at high interest rates; and if he will make a statement.

Sarah McCarthy-Fry: We are concerned about the impact of high-cost credit products on the most vulnerable in society. The Office of Fair Trading is reviewing the market for high-cost credit, and its report is due out in the spring. We will respond quickly to address the issues raised.

Bob Spink: Some interest rates and some lenders' practices are indefensible. What are the Government doing to build the capacity of third sector lenders? We need to do that to displace the need for pay-day loans and logbook loans.

Sarah McCarthy-Fry: I thank the hon. Gentleman for his question and pay tribute to him for his work in protecting vulnerable people and for the number of times he brings these issues to the House to draw attention to them.
	Alongside the work that the OFT is doing on a regulatory basis, we are trying to increase the supply of low-cost credit. There is a key role in that for the growth fund, through which £98.75 million has been made available. It is on target to meet the goal of 150,000 affordable loans a year, through credit unions and community development financial institutions, which are trusted in the community and to which people know they can go to get the low-cost credit that they need.

Lindsay Hoyle: I welcome what my hon. Friend says, but does she agree that the biggest concern is the high interest when people sign up for credit and then the intimidation and bullying that they face in order to get repayments? What more can we do to ensure that there are alternatives, so that people can access the money that they need? How can we promote that, especially through the credit unions?

Sarah McCarthy-Fry: I certainly pay tribute to the credit union movement for its work. As I said, credit unions are rooted in their communities and provide people that those communities know. They give people the information that they need to make informed choices, so they know that they do not have to go to the high-cost doorstep lenders and that there are places where they can access low-cost credit. As I said, credit unions are a prime example of how they can do that.

Mark Hoban: Last week the Treasury ruled out a clampdown on store cards because of the impact that it would have on store card issuers. Why are the Government ignoring the risk that shoppers can be sucked into taking out a store card because of the discounts offered on that day's shopping, but then end up paying one and a half times the interest rate that is normally charged on credit cards? Is it not time to give the OFT the power to clamp down on excessive rates and the marketing of store cards?

Sarah McCarthy-Fry: As I said, the OFT has been doing a quite comprehensive review of high-cost consumer credit and other credit products. It is looking at the attitude and behaviour of consumers and how they use those products, and it is examining evidence from international research. As I said, it will report in the spring, and we are committed to examining that report and taking action on what is put forward.

UK Credit Rating

Richard Ottaway: What recent discussions he has had with credit rating agencies on the UK's AAA rating.

Alistair Darling: As the House would expect, Treasury officials meet a wide range of organisations and have done so for a number of years.

Richard Ottaway: The Chancellor will be aware that the Governor of the Bank of England urged him to publish a credible deficit reduction plan or risk losing Britain's triple A rating. The CBI has said:
	"Current plans to halve the deficit over four years are too little, too late. The UK's AAA credit rating must be put beyond doubt."
	Is it not high time that the Chancellor produced a credible deficit reduction plan so that it could be reduced substantially over the lifetime of a single Parliament?

Alistair Darling: That is not quite what the Governor said, but I say to the hon. Gentleman that we are committed to halving the deficit over a four-year period, which means a sharp reduction in spending. We propose to do that once we believe that recovery is established, from 2011. The Governor made the point that to withdraw support prematurely would risk damaging the economy. I agree with the hon. Gentleman that it is important to have a firm, credible plan. What is quite clear, though, especially in the past few hours, is that the Opposition do not have a credible plan, or even a plan at all. It is quite obvious that they are living from one day to the next. Their proposals are a complete and utter shambles.

David Drew: Is it not about time that we looked at the way in which that system works, with those faceless individuals who seem to have the power of countries in their hands? Is it not about time we demanded transparency, so that those individuals have to answer for some of the decisions they make after scurrying around, briefing against countries? We want some transparency in the system.

Alistair Darling: Inevitably in markets, people say things for different reasons, but what is important is that people are left in no doubt that we have a firm proposal to reduce the deficit over a four-year period. When one looks at the pre-Budget report, one will see that the structural deficit, which begins to be reduced next year, comes down by something like two thirds over that period. That is an example of where we are prepared to act.
	What undermines credibility is someone saying one week that they need to tear up our plans and that not doing so is moral cowardice, and then the hon. Member for Runnymede and Weybridge (Mr. Hammond), the shadow Chief Secretary, when asked about the proposals, saying, as he did yesterday, "I can't give you a specific figure now." When pushed, he said, "Well, it might be £1 billion," and then he says, "Of course, we don't have a detailed plan worked out." That is blindingly obvious. To coin a phrase, he can't go on like this.

Philip Hammond: Could the Chancellor reassure the House that he and the Treasury fully understand the consequences of any downgrade of the UK's triple A credit rating? Apart from the impact on demand for new issues of gilts and the costs of funds, he will be aware that many holders of UK gilts are restricted to holding triple A assets, and therefore that a downgrade risks provoking wholesale disposals by them. Does he have an estimate of the proportion of UK gilts that are held by institutions that hold only triple A rated assets? If he does not, will he ask the Debt Management Office to prepare one and have it available on Ministers' desks on 7 May?

Alistair Darling: The only rating that is being downgraded at the moment is the shadow Chancellor's. I put it to the shadow Chief Secretary that a week ago, the Leader of the Opposition said:
	"We cannot go on like this...And you just need to look at Greece to see what happens if we do"
	but yesterday, the shadow Chief Secretary, when asked on the television-

Mr. Speaker: Order. I am very grateful to the right hon. Gentleman, but he has volunteered his views on these matters at considerable length already. I think we will leave it there.

Capital Allowances (Plant and Machinery)

Rob Marris: What recent assessment he has made of the likely effects on businesses of aligning capital allowances for plant and machinery with depreciation accounting rates.

Ian Pearson: Reforms implemented in April 2008 ensure that capital allowances are more closely aligned with true economic depreciation, and that business investment decisions better reflect commercial rather than tax considerations.

Rob Marris: At a time when the manufacturing purchasing manufacturers' index is at last rising strongly, will the Minister assure me that this Labour Government will not slash capital allowances for plant and machinery, as proposed by the Conservatives? Such a cut would devastate manufacturing in the west midlands and the UK, and cause a double-dip recession.

Ian Pearson: My hon. Friend is right to point to the very promising manufacturing figures that were announced today and to recognise the importance of the capital allowances regime in ensuring investment in our future. Frankly, it is quite ridiculous to have a policy that says, "We're going to give with one hand, and take away with the other,"-a policy of giving corporation tax reductions but taking away the capital allowances that are needed by manufacturing businesses in this country. I am not against cutting corporation taxes-indeed, this Government have cut them by 5p in the main rate since we came into power-but we should not do it at the expense of investment in our future, which is what the Conservatives would do.

Julian Brazier: There is a strong case for a lower rate and a simpler structure. However, increasing the cost of labour through increases in national insurance contributions, while having a generous programme of capital allowances, is unbalancing the cost of capital versus labour, when we have 2.3 million unemployed.

Ian Pearson: The hon. Gentleman cannot get away from the fact that his policy is to reduce capital allowances to 12.5 per cent. and abolish the annual investment allowance. That would mean that more than 400,000 businesses in this country would see an 87.5 per cent. reduction in the tax relief that they can obtain at the moment. That is not a credible policy to support medium-sized businesses or investment in this country.

Fiscal and Monetary Policy

Geraldine Smith: What steps he plans to take to maintain the level of demand in the economy in the next 12 months.

Alistair Darling: As I set out in the pre-Budget report, we will continue to provide fiscal support during 2010-11, alongside the monetary policy action being taken by the Bank of England.

Geraldine Smith: Does my right hon. Friend agree that priority must be given to economic growth and protecting jobs and services and that, while it is important to reduce the deficit, immediate cuts could plunge this country into recession?

Alistair Darling: I very much agree with my hon. Friend. It is important to recognise that across the world, including in this country, it is the support given by Governments that has enabled us to avoid the recession becoming a global depression. It is also one of the reasons why countries are beginning to come back into growth. To remove that support prematurely would run the risk of derailing the recovery. That would be unforgivable, given all the pain that people have had to go through, and that is why we will continue to support businesses and families, to ensure that we get the recovery firmly established. Then we have not only to reduce the deficit, but to ensure long-term growth to provide the jobs in the future.

John Redwood: But cannot the Chancellor see that because he is overspending and over-borrowing in the public sector he is squeezing the private sector, which is having to pay high and rising rates of interest if it can get credit at all? What does he say to people with Skipton mortgages or small businesses that cannot borrow a single penny?

Alistair Darling: As the right hon. Gentleman will know, we have taken steps to ensure that the banks increase the amount of gross lending that they are putting into the economy. At a time when private sector investment has stopped or reduced, if it had not been for the public sector intervention, the downturn would have been much greater than it is. As it is, we can see signs of increasing confidence-he will have seen the survey of manufacturers published yesterday, which is very encouraging. Across the world, we can see the results of Governments acting together and making a real difference. To remove that support prematurely, if indeed that is the Opposition's policy today-who knows?-would be the wrong thing to do because it would be damaging to the country.

Kelvin Hopkins: Does my right hon. Friend accept that the exchange rate is crucial in maintaining a good level of demand in the domestic economy, and that the bounce-back in manufacturing is due largely to the wise and substantial depreciation of sterling? Will he continue the downward pressure on the sterling exchange rate to ensure that our recovery is sustained?

Alistair Darling: As my hon. Friend knows, the Government's policy is to target inflation, but it is the combined efforts of fiscal policy and monetary policy that will make a difference and ensure that we can get through this and achieve the sustainable growth that is absolutely essential. It is very important that we secure that growth and we continue to take no risks with the recovery, and that is why the approach of the Conservatives is profoundly wrong.

UK Budget Deficit

Richard Spring: What recent estimate he has made of the level of the UK budget deficit in comparison with other G20 economies; and if he will make a statement.

Liam Byrne: The International Monetary Fund sets out estimates of deficits around the world. We remain determined to halve the deficit over four years, and we have set out clear plans to do so.

Richard Spring: The Chief Secretary knows full well that in percentage terms this country has the highest budgetary deficit in the entire G20, as well as an extremely anaemic growth rate. What particular failure of Government policy has brought about that fiasco?

Liam Byrne: We make no apology for intervening to protect businesses and families from the worst economic storm for the last 60 years, but the reason that we had the flexibility to take that action is that we went into this recession with the second lowest level of debt in the G7. If the hon. Gentleman takes the IMF figures for 2014, he will see that the figures for this country are 18 per cent. lower than the average for the G7. Once recovery is set in, we have to take steps to halve the deficit over the course of four years and to bring down the structural deficit by some two thirds, and we have set out clear plans to do so-in sharp contrast to the Conservatives.

Sally Keeble: Does my right hon. Friend agree that the worst possible thing to do in dealing with the deficit would be to make disproportionate cuts during the lifetime of the next Parliament? That would lead to savage cuts in public services and a catastrophic loss of jobs in the public sector.

Liam Byrne: My hon. Friend is right. Suggestions have been put to us for reducing public spending next year-for example, reducing eligibility for child trust funds-but of course that would require legislation in this House, which it is unlikely could be delivered within the next financial year. Others have said that we could reduce eligibility for child tax credits, but of course the proposals that we were told would save £400 million would, in fact, save only £45 million. So the Conservative party has offered no credible plans to reduce public spending next year. However, the key point is that it would be the wrong thing to do because it would put at risk the recovery that we have fought hard for.

Tax Avoidance

Adrian Sanders: What steps his Department is taking to reduce levels of tax avoidance by individuals and businesses.

Stephen Timms: We detect avoidance early and we tackle it quickly. The disclosure regime has already helped to prevent more than £12 billion in avoidance opportunities, and in the pre-Budget report, we announced further steps to strengthen it. Building on progress at the G20 London summit, we have signed 21 agreements on tax information exchange with other countries since last January.

Adrian Sanders: If the Government are serious about tackling tax avoidance, why have 25,000 jobs in Her Majesty's Revenue and Customs been cut in the past five years, including recently 20 in my constituency? Surely that hampers the ability of the Minister's Department to investigate, gather evidence and prosecute dodgers.

Stephen Timms: No, we have to manage the affairs of HMRC and other Departments in the most efficient and effective way possible. As the hon. Gentleman said, there has been a substantial reduction in the number of people working in HMRC, partly because of the merger between the old Customs and Revenue Departments, which has enabled a more efficient operation. It is doing a better job, and we are reducing the tax gap, bringing in the tax that the Exchequer needs.

Stephen Hepburn: May I applaud the Government's plans to curb bogus self-employment in the construction industry, which costs this country £1.7 billion a year in lost revenue? May I ask the Minister for an assurance that he will resist any opposition to our plans from construction industry bosses who only want to maintain that culture of hire and fire in the industry?

Stephen Timms: My hon. Friend is absolutely right, and we are certainly sticking to our intentions on that front. In other areas where loopholes emerge, we will act very quickly-on occasions we have acted within days-to close them.

Private Finance Initiative

Anne McIntosh: What recent assessment he has made of the financial viability of Government projects operated under the private finance initiative.

Ian Pearson: Financial viability is assessed as part of the consideration of a project's outlined business case and follows Treasury Green Book rules.

Anne McIntosh: The Economic Secretary will be aware that the country is dependent on a number of waste facilities under private finance initiative projects set when the economy was in a better state. How confident is he that those PFI initiatives will be bid for and met, and that, as a result, the Government will be able to meet their landfill targets?

Ian Pearson: On waste projects, and many other projects supported through the PFI, the Government have a record of which we can be proud. The hon. Lady will be aware of the Manchester waste project of the last calendar year and of the support for it from the Treasury industry finance unit. A number of other waste projects are currently in the PFI pipeline and extend to £19 billion of potential projects. We want to ensure that those projects are delivered, that they deliver good value for money for the taxpayer, and that they help local authorities to meet their landfill targets and our overall carbon targets.

Fiscal Support (Families)

Brian Jenkins: What fiscal measures he plans to introduce to support families in the next 12 months.

Stephen Timms: The child element of the child tax credit will rise by £65 in April; working tax credit and child benefit will rise by 1.5 per cent; tax thresholds will be frozen, providing a real-terms gain for taxpayers; and, from September, free primary school meals will start to be provided to children from lower income working families.

Brian Jenkins: I thank my right hon. Friend for that answer. May I pass on to the Government the thanks of many of my constituents for the working families tax credit-as it says on the tin, "working families". He knows that one of the major problems that a family can face is unemployment. What more can he do to reduce the fear and possibility of families facing that hardship?

Stephen Timms: My hon. Friend is absolutely right. Tax credits have played a crucial role, not least in protecting families from unemployment during the downturn, because access to the tax credit system has made reduced hours, instead of job losses, more feasible for people. For example, from April to October last year, 400,000 families whose incomes have fallen have had extra help, averaging £37 per week. Alongside that, of course, we have provided substantial additional resources to Jobcentre Plus, which is why, contrary to many expectations, the number of people in work has remained much more buoyant.

Graham Stuart: Can the Minister confirm whether Energywatch is right to say that the number of families in fuel poverty, at 5.9 million, is greater than at any time in the past 10 years? Could he also tell the House whether the Government plan to meet the child poverty target that they set for 2010?

Stephen Timms: It is of course the case that we have provided substantial support to families over the past couple of years during the downturn. That is why, for example, there are so many fewer home repossessions than were expected, while unemployment is less and the crime rate has gone down rather than up. There is still more to be done on fuel poverty. On child poverty, independent estimates are that we will be about two thirds of the way towards the 2010 target, despite the obvious challenges that we have faced during the downturn, and, as the hon. Gentleman knows, we have legislated for a 2020 target as well.

Joan Humble: Many parents are unaware of the support available to them to help them pay the costs of child care if they want to go back into work or remain in work. Will my right hon. Friend liaise with colleagues to ensure that parents understand that there is a child care tax credit, that there will be more free child care places later this year and that there will be pilots for low-cost loans to help parents pay up-front child care costs, so that they can remain in work and their children can be lifted out of poverty?

Stephen Timms: My hon. Friend is absolutely right. Access to good quality affordable child care is crucial for enabling parents to return to work, and we will indeed make further progress as she said.

Better Healthcare Closer to Home

Tom Brake: When he will give final approval for expenditure on the Better Healthcare Closer to Home project.

Liam Byrne: Moving health care closer to home is a policy objective of this Government. I think that the hon. Gentleman has in mind a scheme that has been submitted by his local NHS to the Department of Health. That scheme is currently under consideration by that Department and when it comes to me, I can assure him that I will review it thoroughly, but also promptly.

Tom Brake: I would like to thank the Health Minister, the right hon. and learned Member for North Warwickshire (Mr. O'Brien), for his support for the project. Would the Chief Secretary be willing to meet concerned local Members of Parliament over the next couple of weeks, so that we can ensure that the pressure is maintained on the different partners involved in the project and ensure that Better Healthcare Closer to Home is delivered for the residents of Sutton and Merton? The next four weeks are critical.

Liam Byrne: I am always happy to meet groups of right hon. and hon. Members. In particular, I would like to put on record my thanks to my hon. Friend the Member for Mitcham and Morden (Siobhain McDonagh) for her tireless campaigning on behalf of the project. We are proud of the number of hospitals that the Government have built. We said that we would build 100 new hospitals by 2010; in fact, the Department of Health is on course to build 126 by the end of this year. The scheme to which the hon. Gentleman referred is yet to come to me for approval. The House would expect me to look at the business case thoroughly when it arrives, but as I said to him a moment ago, I also understand the need for speed.

Siobhain McDonagh: May I thank my right hon. Friend for that answer? Can he make a commitment to ensure that the health services received by my constituents will continue to be a top priority for this Government?

Liam Byrne: My hon. Friend can rest assured on that point. I met the Secretary of State for Health last week to begin our preparations together for considering that particular project. I hope that she will be able to join me and any other hon. Members who would like to get together to discuss that important new development.

Public Sector Debt

David Heathcoat-Amory: What estimate he has made of the peak amount of future public sector debt; and when he expects that peak to be reached.

Ian Pearson: As set out in the pre-Budget report, public sector net debt is forecast to peak at 77.7 per cent. of GDP in 2014-15. Projections beyond that are consistent with debt falling as a share of GDP in 2015-16. Although the UK's public debt is rising in response to the recent shocks, it will remain in line with that of other advanced economies.

David Heathcoat-Amory: That means that the national debt will reach £1.4 trillion. Is the Minister aware that if we repaid debt at the rate of £1 every second, we could repay £1 million in 12 days, but that it would take 44,000 years to repay the total debt to which he has alluded? Does that not strengthen the case for starting early?

Ian Pearson: As has been made very clear, we want to take action to curb the deficit and reduce debt. We have set out plans to halve the deficit over four years. The right hon. Gentleman should be aware that our figures for net debt compare pretty much with those of France and Germany and with the G7 average this year, not according to the Government's figures, but according to the International Monetary Fund's figures. I am sure he will welcome that.

Alcohol (Minimum Price)

Andrew Turner: What discussions he has had with ministerial colleagues on the revenue which would accrue to the Exchequer if proposals for a minimum price for alcohol were implemented.

Sarah McCarthy-Fry: There are a number of different approaches available if proposals for a minimum price for alcohol were implemented. The revenue impacts, which could be positive or negative, would depend on the level of any minimum price and the way in which minimum pricing was implemented.

Andrew Turner: Does the Minister agree that such proposals might lead to increased prices on imported alcohol? How does she think our trading partners would react?

Sarah McCarthy-Fry: We would have to take such a consideration into account if we were introducing minimum pricing. Duty alone could not deliver minimum pricing for alcohol products, but when we consider changes to duty rates, we have to consider impacts on the industry, as well as on Exchequer revenues.

Brian Iddon: Why is the Treasury so against a unit price for alcohol below which it cannot be sold by anyone, including supermarkets?

Sarah McCarthy-Fry: I thank my hon. Friend for his question. I refer him to the answer that I gave to the original question. We cannot use alcohol duty alone as a mechanism to deliver minimum pricing for alcohol products; there are a number of practical and legislative constraints. We are, of course, always willing to consider the matter further and to consult other colleagues about it.

Greg Hands: Like the hon. Member for Bolton, South-East (Dr. Iddon), the Health Secretary appears enthusiastic about minimum pricing, but it would hit responsible drinkers hard, without any benefit to the public finances. I know that much of the Government's economic policy is back to the 1970s, but setting the price of goods is surely a step too far. Instead of trying to fix prices, should they not try and fix the problem and raise taxes on problem drinks, rather than on responsible drinkers?

Sarah McCarthy-Fry: I must remind the hon. Gentleman that there is an EU rates and structure directive that means that beers and spirits must be taxed in proportion to alcohol content, and wines and cider must be taxed in bands of alcohol strength, which constrains what we can do on specific drinks. Also, alcohol duty is paid by producers. That applies equally, regardless whether products are sold in pubs or supermarkets. Many of the problems cited by hon. Members are not about responsible drinkers in pubs, but about the prices charged in supermarkets. As I said, alcohol duty alone cannot deliver a solution.

Early Intervention Policies

Graham Allen: What assessment he has made of the effects on the economy of implementation of policies for early intervention; and if he will make a statement.

Liam Byrne: The Government fully recognise the benefits of early intervention and the value for money that it brings. That is why I announced in the Command Paper that I laid before the House before Christmas a new programme of work designed to test innovative forms of finance aimed at boosting investment in early intervention.

Graham Allen: We all seem to be agreed that we need to reduce the deficit by half over four years, but there are two ways to do that-either by reducing public expenditure, or by reducing the need for that public expenditure by intervening early in the problems that much public expenditure is spent on, so that that expenditure is not necessary. Will my right hon. Friend and the Treasury exercise due diligence in looking at the financial instruments that are being developed on the capital markets, which could raise money in the first instance to make sure that early intervention programmes can be sustained?

Liam Byrne: I would like to put on record my personal thanks to my hon. Friend for the pioneering work that he has overseen in Nottingham, where there is a great deal for policy makers and for politicians to learn. Like him, I am keen that we explore new ways of drawing money into innovative projects focused on early intervention, and I hope the measures that we have announced to create in this country a social investment wholesale bank, together with social impact bonds that will be brought forward by the Secretary of State for Communities and Local Government and, I hope, the Secretary of State for Justice will be a substantial step in testing some of the ideas that are being pioneered now in Nottingham.

Fiscal and Monetary Policy

Andy Reed: What steps he plans to take to maintain the level of demand in the economy in the next 12 months.

Ian Pearson: As my right hon. Friend the Chancellor said some moments ago, we will continue to provide fiscal support during 2010-11, alongside the monetary policy action being taken by the Bank of England.

Andy Reed: My hon. Friend will not be surprised to hear that when I met representatives of 3M Health Care in my constituency, it said that it was quite clear that expenditure in the health service over the last 12 months had meant the difference between keeping the company going and it possibly folding. Will he ensure that moneys spent recognise the impact of such expenditure on the private sector as well as on the public sector? Those 600 company jobs in Loughborough are thanks to the excellent work of investing in the national health service.

Ian Pearson: My hon. Friend is absolutely right to highlight the importance of public procurement in supporting private sector jobs in this country. The figures show that more than 95 per cent. of Government spending on procurement goes to UK firms. I am sure that we all appreciate that. There is a direct link between Government spending, public procurement and jobs in the UK economy. We need to ensure that we get good value for money while at the same time supporting UK firms.

Nicholas Winterton: Would the Minister not accept that this country's elderly can also help to maintain demand in the economy? Bearing in mind that many of them rely on their savings, on which they getting a negative return because of inflation and taxation, is it not time that the taxation system enabled the elderly, who rely upon savings, to get some meaningful return for their responsibility?

Ian Pearson: I know the hon. Gentleman has always raised the issue of pensioners and is a champion of them. He will be aware, however, that this Government have taken many pensioners out of poverty through the measures we have introduced-for example, by increasing the limits on individual savings accounts in the 2009 Budget and by providing an opportunity for tax-free savings for the over-50s, including pensioners, which is to be extended to all savers from April this year. Those are welcome measures, and as a Government we will always want to acknowledge the vital role pensioners play in contributing to our economy-just because people are retired, it does not mean that they are not economically active citizens and are not contributing to our society.

Topical Questions

Annette Brooke: If he will make a statement on his Departmental responsibilities.

Alistair Darling: The Treasury's responsibilities remain as I have set out on previous occasions.

Annette Brooke: Given that this Government's policies have failed to reverse the rising income inequality of the Tory years, does the Chancellor agree that raising the basic tax allowance would help pensioners like Mr. Whitty of my constituency, who has very little and yet still pays income tax?

Alistair Darling: Over the past 12 years, we have taken measures to take an increasing number of pensioners out of tax precisely by raising their personal allowances.  [Interruption.] I am sure that the hon. Lady is being unintentionally distracted by her hon. Friend the Member for Southport (Dr. Pugh), but I was making the point that because we have raised personal allowances for older people, we have been able to take more pensioners out of tax. On top of that, measures such as the winter fuel allowance and others have helped elderly people meet their responsibilities and enjoy a better standard of living than they would otherwise have done.

Barry Gardiner: Is my right hon. Friend aware that more than a year ago, the European Council took a decision to raise funds for carbon capture and storage projects by exceptionally permitting the Commission to auction new entrants reserve allowances for the emissions trading scheme-a decision that has resulted in a proposal to comitology today. Will the Chancellor confirm whether the UK Treasury has dropped its demand that it, rather than the Commission, control the auction of the UK share of these allowances, and that the entire CCS strategy of the Commission will now be able to proceed unhindered?

Sarah McCarthy-Fry: I would like to assure my hon. Friend that HM Treasury remains fully supportive of carbon capture and storage. We are committed to the demonstration projects in the UK and we welcome the use of EU funds to bring those projects forward. It is correct that the negotiations and discussions in the comitology process are going on today, so I do not wish to prejudice them. Let me nevertheless be clear that any decisions to support the specific proposal will not in any way prejudice future negotiations on the auctioning of allowance under phase 3 of the directive.

George Osborne: Yesterday, in response to a freedom of information request from us, the Treasury published a document to which they had referred-I have it here-citing international examples of spending consolidations. They have redacted pages and pages of it. They have even redacted the front cover. Can the Chancellor explain why?

Alistair Darling: I am sure that there was a good reason. As the hon. Gentleman and the House know, the Freedom of Information Act provides for advice to Ministers to be withheld. As for the document referred to, for the most part, it brings together contemporary literature on the question of fiscal consolidation.
	It seems to me, however, that it is the hon. Gentleman who has the problem. Five times today he was asked what his plans were for next year, and five times he refused to answer.

Gordon Marsden: Treasury funding for Sure Start children's centres in Blackpool, of which there are now 12, has been crucial for the nearly 8,000 families in the catchment area. Will my right hon. Friend's fiscal plans for the future include a commitment to continuing support for Sure Start-not just the buildings, but the outreach staff and the people who go into the communities, whom we would fund and the Conservative party would not?

Stephen Timms: We have committed ourselves to maintaining spending on Sure Start children's centres in real terms beyond next year. We will continue that spending in the following two years in order to protect the invaluable help for families that those centres provide, which my hon. Friend rightly supports and from which people across the country are benefiting.

Danny Alexander: In the run-up to the last Budget, the Economic Secretary kindly met representatives of Highlands council and me to discuss the proposals for temporary relief from the council's huge housing debt repayments, which were intended specifically to create jobs in the local construction sector. Given the need to continue to support jobs and growth in the economy over the next year, will the Economic Secretary look again at the council's positive, constructive suggestion of a way to create jobs in the highlands?

Ian Pearson: As the hon. Gentleman will remember, there was correspondence later which was followed up. However, I appreciate his concern about the impact of the problem in his area and the potential of the council's proposals, and I shall be more than happy to look at those proposals again.

Ken Purchase: What arrangements is the Economic Secretary making in relation to international agreements about tax avoidance and evasion? I am thinking particularly of Belize, where I understand a major donor to the Conservative party may be avoiding taxation.

Dennis Skinner: And Notting Hill.

Stephen Timms: We have made a great deal of progress on tax information exchange agreements in the last year. I believe we have made more progress in the last year that in the previous 10 years put together. Last week the OECD published a report showing good progress across the board. In regard to Belize, however, I can tell the House that no agreements have been signed so far.

Andrew MacKay: Just why did the Chancellor earlier duck a direct question from the shadow Chancellor, my hon. Friend the Member for Tatton (Mr. Osborne), about the future of the Prime Minister's Tobin tax proposals? Was it because he was embarrassed to take sides between the Governor and the Prime Minister?

Alistair Darling: The House will know that on 10 December last year the Government published a wide range of proposals relating to matters including transaction taxes, increased capital and the insurance levy. All those matters are still being discussed. The IMF has been asked to come up with proposals, which will be discussed at the spring meetings.
	As I said earlier, there are problems which we know need to be dealt with at global level. We have constructive proposals for doing that, and we will work with other countries to ensure that this year we implement what we agreed to do last year. That is critical.

Sandra Osborne: People in Coventry can benefit from the boiler scrappage scheme, whereas people in Cumnock cannot because the Scottish Government refuse to implement it. Does the Minister agree that people in my constituency and throughout Scotland would benefit from the scheme, and will he make representations to that effect?

Liam Byrne: My hon. Friend will know of the virtues of the scheme that was introduced in England. It can not only deliver a reduction in families' heating bills, but have an impact on reducing the country's carbon emissions. The requisite spending is a devolved matter in Scotland. Barnett consequentials were provided on the £20 million addition that was made to the budget of the Department of Energy and Climate Change, but the argument will of course need to be prosecuted in Scotland.

Ann Winterton: Is the Minister aware that Her Majesty's Revenue and Customs has acknowledged that there are errors in some of the tax codes currently being issued, caused, I understand, by the transfer of data to a new computer system? The advice is to ring to register that a tax code might be wrong, but the lines are constantly engaged, so people cannot get through. Will he look at that problem and sort it out?

Stephen Timms: I certainly will. It is the case that a new computer system is being used for PAYE this year. It is working very well and is enabling HMRC to hold in one place all the records on one person's employment and pensions, which was not possible in the past. As the hon. Lady has said, there has been an issue about tax codes, and HMRC will be working to iron out the problem well before the start of the new tax year. I will look into the issue about the phone line-for those who are interested, the number is 0845 3000 627.

Mark Lazarowicz: Earlier in Question Time, the Minister outlined some actions that the Government have taken to tackle extortionate credit offers by doorstep lenders and store cards. One of my constituents recently received an email from PaydayUK offering a loan with APR interest of 1,737 per cent. Will the Government ensure that that type of online offer and newer forms of lending on offer in the marketplace are tackled, as well as traditional forms of lending?

Sarah McCarthy-Fry: I can certainly assure my hon. Friend that we are very concerned about these high-cost credit products. That is why the Office of Fair Trading is bringing forward new guidance on irresponsible lending to cover the marketing and selling of credit products. We are determined to tackle irresponsible lenders, and we are sure that we will be able to take action against those who are unable or unwilling to follow the guidance.

David Evennett: Is the Minister aware that businesses in my constituency are suffering because they cannot get the credit that they need to survive? Can he outline what recent instructions he has given to those banks in receipt of billions of pounds of taxpayers' money to ensure that small businesses can get the credit that they desperately need?

Alistair Darling: As I said earlier, we have agreements with the Royal Bank of Scotland and Lloyds to increase the amount of money that they are lending to the small and medium-sized enterprise sector. That lending has been issued, although the net figure is affected by the fact that there have been some quite large-scale repayments. In the first instance, the hon. Gentleman should do what I do and write to the branch of the bank that the small business deals with. If that does not work and the hon. Gentleman continues to have difficulties, I will be happy if he gets in touch with me and lets me know what those specific difficulties are. He will appreciate that sometimes the bank may be acting unreasonably, but that at other times there may be a reason why someone has been refused credit.

Don Touhig: I listened with interest to the answers that my right hon. Friend the Chancellor gave to Question 1. The Americans appear to favour safe retail banks, guaranteed by the taxpayer, and casino investment banks that would not have such guarantees. I am sure that he would agree that the British taxpayer should not be on the hook for the risky activities of British bankers. Does he also agree that it is important that we get an early decision from the Government on how they intend to proceed?

Alistair Darling: First, I think that we should wait and see what the final American proposal is because discussions are taking place and it may not be quite as was reported last week. We will see. In relation to my right hon. Friend's point about what he calls casino banks, the safe investment banks, the problem with that approach was probably demonstrated most vividly in relation to Lehmans. It did not have a single retail deposit in it. The then American Administration let Lehmans collapse and it brought down the world's banking system on top of it. That rather makes the point that it is difficult for any Government to say in advance that they would never step in in relation to a particular bank, especially if there were a systemic crisis, as there was in 2008. That is the difference that I have in relation to approach but I look forward to discussing the matter with the United States Treasury Secretary when I see him in Canada on Friday.

Robert Smith: Last Wednesday, the Chancellor made a welcome announcement to encourage greater investment in gas production west of Shetland. Can he confirm that that sends a signal to other investors in the industry that, if they are willing to come to the Treasury with detailed cases, the Treasury will be willing to look at ways to unlock further potential from our resources offshore?

Alistair Darling: Up to a point; I would not want to raise false hopes. As the hon. Gentleman knows, because he has long taken an interest in these matters, for some time, there has been a lot of discussion on how we can open up the waters to the west of Shetland to get at the oil and gas supplies there. It is estimated that about 20 per cent. of oil and gas supplies are there, waiting to be exploited. The measure that I introduced last week will, I hope, mean that some companies will be prepared to consider investing there. That is very important if we are to safeguard the security of supply of oil and gas, which is important. Of course I am always open to suggestions, but I would not want people to think that they only had to knock on the door and they will get what they want. That is probably not the case.

Geoffrey Robinson: Will the Minister take a look at the question of the differential interest rates that apply in many private finance initiative contracts? Interest rates were a lot higher when those contracts were signed, and all interest rates are now a lot lower. Cannot an area of equilibrium be found among those currently paying such high interest rates?

Ian Pearson: My hon. Friend is well aware of how many of these schemes there are and the details of how they operate, so he will know about the contractual obligations that are entered into and what scope there might be for renegotiating some of the existing contracts. We always look at this issue closely and discuss it widely with the PFI community, and I can certainly undertake to take away my hon. Friend's suggestions and examine them carefully.

Christopher Fraser: Steps to address excessive risk-taking in the financial sector are necessary, but financial regulations must not be introduced at the expense of competitive business. What is the Chancellor doing to ensure that this principle is followed in the negotiations on the directive on alternative investment fund managers?

Alistair Darling: The hon. Gentleman will no doubt be aware that we are discussing that directive with the Commission and the presidency, which is held by Spain, because we have concerns about it. The hon. Gentleman is absolutely right that we must ensure that at one and the same time we have sufficient supervision and regulation to make the system safer while also remembering that that must operate alongside the ability of financial institutions to generate the finance upon which our economy and those throughout the world depend.

John Grogan: What is the Treasury's attitude to proposals by the Campaign for Real Ale and the British Beer and Pub Association to the European Commission that countries should be allowed to levy a lower rate of duty on draught beer, thus helping pubs in the same way as a lower rate of duty on small brewers has helped them?

Sarah McCarthy-Fry: We recognise the difficulties facing small pubs and breweries. As I said earlier, restrictions operate under EU directives, and we are continuing to have discussions with our EU partners to see if we can make progress on this matter.

Angus MacNeil: The cost of London Crossrail is £16 billion, with extra money being found from central Government at Westminster, whereas the cost of the Glasgow air link would be a 40th of that. What will the Government who control the UK purse strings do? Will they take the opportunity to provide the extra money for the Glasgow air link?

Alistair Darling: Well, I have to say to the hon. Gentleman that it was the Scottish National party Government in Scotland who cancelled the Glasgow air link. Therefore, how on earth he has got the gall to stand up and somehow blame someone else really says it all about the nationalists. They cut the rail link; they have to live with the consequences.

Brooks Newmark: Will the Minister please confirm the current level of public sector pension liabilities that the Government are hiding off balance sheet, both in absolute terms and as a percentage of GDP?

Liam Byrne: As the hon. Gentleman will know, the figures for public pension liabilities, and the way in which they are financed, were set out in the long-term finance report that was presented to the House alongside the pre-Budget report.

Greg Mulholland: Rugby league remains a game rooted in the community. It is not awash with money and players are not paid huge salaries, yet the Leeds Rhinos testimonial committee has told me that testimonials will now be taxed retrospectively. That is unacceptable; how can the Treasury change the rules, which will damage a sport and its players?

Stephen Timms: I am not aware of there having been any change of policy on this, but I will, of course, be very happy to look at the particular case the hon. Gentleman raises.

Peter Bone: Is the Chancellor able to tell the House what the contribution of UK taxpayers to the European Union will be for this year, and how much more that will be than the contribution for last year?

Alistair Darling: I refer the hon. Gentleman to the figures in the pre-Budget report.

Points of Order

Greg Hands: On a point of order, Mr. Speaker. You will recall that on 21 January an urgent question was answered by the Minister for Europe on exchange rate movements and their effect on the Foreign and Commonwealth Office budget following the announcement of a £170 million loss in that budget as a result of sterling's depreciation. In answer to a question from me about hedging, he said that the Foreign Secretary had written to the shadow Foreign Secretary on the subject. After further questioning from my hon. Friend the Member for Kettering (Mr. Hollobone), the Minister for Europe pledged to put a copy of that letter in the Library. I have to report to you, Mr. Speaker, that that letter has not appeared in the Library-and that according to the FCO, that is because the letter was never written. Can we ensure that the Minister for Europe comes to this House to explain not only why this has happened, but all the background to the effect of the depreciation of sterling, and the FCO's failure to hedge for it, on the FCO's budget?

Mr. Speaker: I am grateful to the hon. Gentleman for his point of order. He has given to the House a very specific and detailed sequence of events and the House will have heard it; it is very clearly on the record. What I would say to him is that if a Minister promises that a letter will be placed in the Library, it should be placed in the Library, and that should be done without delay; what is promised should be delivered. I hope that the hon. Gentleman will understand if, beyond that, I simply say that I will look further into the matter, and that he has put his concerns very fairly and squarely on the record today.

David Drew: On a point of order, Mr. Speaker. Yesterday we reached the end of the business on the Constitutional Reform and Governance Bill in Committee, and we then lost time that could have been spent having a vote on new clause 52. There was a problem with how the handover when the House came out of Committee was to be conducted. We were told that that was an unprecedented development. Will you look into what happened? The matter was raised in two points of order yesterday, but I hope that you will examine how it was not handled well and how we need to learn from that, because Back Benchers, who have very little access to time, could have had the opportunity to move something about which many of us felt strongly.

Mr. Speaker: I am grateful to the hon. Gentleman for his point of order. Although I did not receive advance notice of it-I make no complaint about that, I hasten to add-I had a sense, given the strength of the points of order made last night, that this matter might be raised. I hope, therefore, that it will be helpful to the House if I make a short statement about those events.
	I certainly do understand there was a hiatus last night-with the business in Committee on the Constitutional Reform and Governance Bill finishing significantly earlier than expected-and the House was informally suspended for just five minutes. I am grateful, of course, to the Deputy Speakers and to members of the Chairmen's Panel for their flexibility in chairing proceedings, whatever happens. I cannot comment on what happened in Committee-the House will understand that I am precluded from doing so-but I have inquired about new clause 52. I understand that once new clauses 85 and 86 had been agreed to, that decision of the House overtook new clause 52 and so ruled out the possibility of a separate Division upon it. No doubt Report stage will give Back Benchers other opportunities. As for whether the time of the House was well spent yesterday-the fifth day on this Bill-the management of legislative time on the Floor of the House is a matter for the Government.

Compensation Act 2006 (Amendment)

Motion for leave to  bring in  a Bill (Standing Order No. 23)

Jeremy Wright: I beg to move,
	That leave be given to bring in a Bill to amend the Compensation Act 2006 to ensure that courts considering a claim of negligence or breach of statutory duty apply a presumption that defendants undertaking a desirable activity have satisfied the relevant standard of care; and for connected purposes.
	Last month, a large part of Britain was brought almost to a standstill by significant snowfall and freezing conditions. Local authorities up and down the land ran short of salt and were unable to grit many roads-and in particular, many pavements. Those pavements became impassable, or even dangerous, resulting in slips and falls and keeping some of our most vulnerable citizens virtually prisoners in their homes.
	To their great credit, some people decided to help their neighbours and the wider community by clearing not just their own driveways and garden paths but the pavement outside their houses or their children's schools. Others read their newspapers and decided not to. That was substantially because those newspapers quoted a variety of lawyers who said that if people were to clear the snow off their part of the pavement and then someone were to fall over on it, they might be sued for negligence. Inaction, the lawyers said, was the safer option-and so the pavements stayed uncleared, because the council could not do it and householders would not do it. That is the type of situation that the Bill seeks to address.
	Of course, some say that there is not really a problem, because the courts are very unlikely to find the public-spirited domestic snow shoveller negligently liable for any injuries, in the absence of spectacular incompetence. They may be right, but I do not think that the public-spirited domestic snow shoveller feels reassured, and many such people, to be on the safe side, remain deterred from doing the right thing by a fear that the law would not be on their side. What matters in that deterrence is not just the likelihood of a negligence action succeeding, but the likelihood of a negligence action being brought in the first place, incurring all the worry and potential expense needed to defend it.
	We now live in a Britain where such negligence actions look more likely than they have ever done. Large legal advertising budgets are spent on persuading us that "Where there's blame, there's a claim", and that there almost always is blame. We have been conditioned to believe that there is no such thing as an accident any more, only a negligent act for which somebody owes compensation, even if they were trying to be helpful at the time. So the safest thing is to leave the snow shovel in the shed. That is not a perception that this House should allow to persist.
	Others say that there has been a problem, but that the passing of the Compensation Act 2006 has solved it. Section 1 of the Act states, broadly, that a court considering a claim for negligence or breach of statutory duty, in determining whether a defendant should have taken particular steps to meet a standard of care, may have regard to whether a requirement to take those steps might prevent or limit a desirable activity or discourage people from organising or taking part in it. In other words, the desirability of the activity the defendant was engaged in at the time of the alleged negligence, and the benefit to the community of what he or she was doing, constitute only one of the factors that the court may consider, and it is not obliged to consider that factor at all.
	During the passage through the House of the Bill that became the Compensation Act, the Government made it clear that section 1 did not, in their view, represent a change in the law. It was instead a restatement of the existing law, intended to reassure those involved in what the Act described as "desirable activities" that in carrying out those activities, they should not fear negligence actions.
	The Compensation Act has now been on the statute book for three years, and I am afraid that the national conversation on snow clearing that we have heard over the past few weeks demonstrates that the Act has not succeeded in that aim. I believe that the House must go further. In addressing the specific issue of a private citizen's involvement in clearing snow and ice from pavements, we could go much further and make that involvement compulsory, as is the case elsewhere in the world.
	In the United States, for example, various municipal codes require homeowners and tenants to clear all snow from the sidewalk adjacent to their homes within a specified number of hours after it has fallen, or after sunrise, if the snow has fallen at night. In Germany, the rules are set out in the Satzung über die Verpflichtung zum Reinigen, Schneeräumen und Streuen auf Gehwegen, which, as you will immediately recognise, Mr. Speaker, is the "Statute concerning the obligation for the cleaning, removal of snow, and sanding on walkways". It sets out householders' responsibilities in considerable detail, including the substances to be used for gritting their part of the pavement, the maximum grain size thereof and the specified minimum width of the cleared area. The House will be relieved to know that I do not propose the same legislation here.
	I propose that we amend section 1 of the 2006 Act so that when a court considers a claim of negligence against someone who has done something for the benefit of their community, it will not simply regard their public-spiritedness as one factor among many that it may or may not take into account. Instead, there should be a presumption that someone who has engaged in that sort of desirable activity has satisfied the relevant standard of care. The court would not be prevented from finding someone negligent if they had gone about that desirable activity in a wholly incompetent or irresponsible way, but it would start from the premise that those who act to help their community should get a very strong benefit of the doubt. I believe that that will succeed in sending to the public the message that section 1 of the 2006 Act seems to have failed to send.
	In many ways, this is a modest Bill. It does not seek to affect what anyone does as part of their employment. It does not seek to compel anyone to act nobly, or to condemn those who do not. It seeks simply to remove an obstacle from the path of those people in our society who are willing to put themselves out for others. I do not doubt that the Bill's drafting could be improved if it were to make progress, but it is meant to send the message that if someone makes an effort to do the right thing, the law will stand behind them, not in their way. We need people to do their bit. January 2010 will not be the last time we have heavy snow, or the last time local councils run out of grit when there is heavy snow, and we want people to feel able to help their neighbours when the authorities cannot. More generally, in times of snow, flood or any other form of adversity, our communities are at their best when people come together and help each other with individual acts of kindness and consideration. That is what strengthens society, and it is our job as legislators to encourage that-or at the very least not to discourage it. I believe that the Bill would support the kind of society that we all want to see, and I commend it to the House.
	 Question put and agreed to.
	 Ordered,
	That Jeremy Wright, Mr. Mark Harper, Mrs. Maria Miller, Mr. David Lidington, Mr. Philip Hollobone, Rob Marris, Mrs Siân James, Tim Farron, John Hemming, Angela Watkinson, James Duddridge and Mr. Stephen Crabb present the Bill.
	Jeremy Wright accordingly presented the Bill.
	 Bill read the First time; to be read a Second time on Friday 5 March, and to be printed (Bill 58).

Flood and Water Management Bill

Consideration of Bill, as amended in the Public Bill Committee

New Clause 22
	 — 
	Social tariffs

'(1) An undertaker's charges scheme under section 143 of the Water Industry Act 1991 may include provision designed to reduce charges for individuals who would have difficulty paying in full.
	(2) Subsection (1) includes schemes which have the effect of subsidisation by other persons.
	(3) The Water Services Regulation Authority's powers in connection with the approval of schemes (and its other powers under the 1991 Act) are subject to subsections (1) and (2).
	(4) The Minister must issue guidance in respect of subsections (1) and (2) which must, in particular, include factors to be taken into account in deciding whether one group of customers should subsidise another; for which purpose the Minister shall have regard to the need to balance the desirability of helping individuals who would have difficulty paying in full with the interests of other customers.
	(5) Undertakers and the Authority shall have regard to any guidance issued by the Minister under subsection (4).
	(6) "The Minister" means-
	(a) in the case of an undertaker whose area is wholly or mainly in England, the Secretary of State, and
	(b) in the case of an undertaker whose area is wholly or mainly in Wales, the Welsh Ministers.'.- (Huw Irranca-Davies.)
	 Brought up, and read the First time.

Huw Irranca-Davies: I beg to move, That the clause be read a Second time.

Mr. Speaker: With this it will be convenient to discuss the following: new clause 16- Training and development of employees in water sector -
	'(1) The Water Industry Act 1991 (c.56) is amended as follows.
	(2) After section 37(3) insert-
	"(4) It shall be the duty of each water undertaker to ensure it maintains investment in the training and development of its workforce. Each undertaker shall be required by Ofwat to include in their twenty-five year strategic plan measures to ensure that sufficient investment is being made in training and development".'.
	New clause 17- Duties for sustainable management and use of water -
	'(1) The Water Industry Act 1991 is amended as follows.
	(2) After section (2)3 insert-
	"(3A) The Director of Ofwat shall carry out the duties imposed by this section in such a way as to:
	(a) promote the sustainable management and use of water;
	(b) ensure that the regulatory duty of Ofwat is structured to promote sustainability in the water management supply chain, paying particular attention to innovation in treatment processes, energy efficiency, job security, leakage control and water efficiency activities, including an obligation to promote a more long-term (twenty years or more) approach by water companies to their investment programmes;
	(c) promote skills in the water industry, by publishing a skills strategy; and
	(d) promote employment in the water industry through an annual report to Ministers on the number of jobs in the sector and in the supply chain."'.
	New clause 18- Role of the Water Services Regulation Authority (OFWAT) -
	'(1) The Water Industry Act 1991 (c. 56), is amended as follows.
	(2) After section 2A(d) add-
	"(e) to promote-
	(i) sustainable water management;
	(ii) innovative treatment processes;
	(iii) energy and water efficiency;
	(iv) job security;
	(v) leakage control;
	(vi) skills in the water industry; and
	(vii) employment in the water industry."'.
	Amendment 22, in page 28, line 37 [Clause 43], at end add-
	'(6) An undertaker's charges scheme devised under subsection (1) must be overseen by the Water Services Regulation Authority (Ofwat).'.

Huw Irranca-Davies: May I take this opportunity, now that we have come out of Committee, to thank the Opposition Front-Bench teams and Back Benchers on the Committee, as well as others who have taken a keen interest in the Bill? What was already a good Bill was improved in Committee-and I am sure that it will be an exemplary Bill when it emerges from our deliberations today and goes on to the other place.
	This group of amendments relates to the role and responsibilities of Ofwat and the water and sewerage undertakers, and to the design of those undertakers' schemes of charges. New clause 22 has been tabled in response to concerns raised in Committee about the affordability of water and sewerage bills for some households. The Government are bringing it forward to enable water and sewerage companies to include social tariffs for groups of customers who have difficulty in paying their bills.
	Such social tariffs may introduce new cross-subsidies between groups of customers. Ofwat, the independent economic regulator, may not reject charges schemes on that basis out of hand. It still has a crucial role in the process-to ensure that tariffs are in the interests of customers-but it will have to be able to show that any action that it takes in approving or rejecting a charges scheme does not undermine the general principle behind the new clause.

Lembit �pik: I have one question on that specific point. I applaud the Government for taking on board the feedback that I understand was given in Committee, but I am concerned that, at least in theory, Ofwat could still ignore the attempts by private water companies to provide concessionary rates for customers who are less well off. How can the Minister assure the House that it will not intervene when to do so would be socially unacceptable?

Huw Irranca-Davies: There are safeguards in the new clause, which I will come to in a moment. They include the requirement that Ofwat consult its wider consumer base, because we do not want to solve one problem only to create another. The new clause makes it clear that Ofwat must play a positive role in the charges schemes being brought forward and then work with stakeholders. I have got no further than my opening remarks, and I hope that the hon. Gentleman will allow me to explain a little more.
	Under existing legislation, Ofwat has a duty to ensure that charges schemes are not
	unduly preferential or unduly discriminatory.
	The UK Government and Welsh Assembly Government must provide in legislation that social tariffs introducing new cross-subsidies are lawful. We are bringing this new clause forward for that reason, as we believe that it gives Ofwat the legal assurance that it needs to allow companies to bring forward social tariffs.
	By way of response to the hon. Member for Montgomeryshire (Lembit Öpik), I can tell him that Ofwat made it clear in evidence to the Committee that it felt that there was not sufficient legal clarity to compel it to consider that approach. This new clause is designed to provide just that clarity; I believe that Ofwat will be reassured in that regard.
	As the House is aware, the Walker review of charging for household water and sewerage services published its final report in December. It highlighted the plight of customers who face difficulty meeting their bills because the increase in water metering in some areas can exacerbate the affordability problem for low-income families who had previously been helped by a cross-subsidy inherent in a charging system based largely on a property's rateable value.
	We are considering Anna Walker's final recommendations carefully, ahead of a full public consultation. One of her recommendations involves possible changes to the vulnerable groups tariff, but we agree with the Committee's conclusion, prompted by the hon. Member for Cheltenham (Martin Horwood), that it is timely to enable companies to include social tariffs that can reflect local circumstances. Those social tariffs could complement any tariffs that we might want to provide for nationally in secondary legislation in the future.

Lembit �pik: It would be remiss of me not to praise my hon. Friend the Member for Cheltenham (Martin Horwood) for his contribution in Committee, and I am grateful for that clarification by the Minister. For the sake of the record, however, will he confirm that when private companies seek to provide more generous terms for less well-off customers, the default position for Ofwat is that it will be obliging? Will he make it clear that it will not seek a technical or specific loophole to prevent those more generous terms from being put in place?

Huw Irranca-Davies: I do confirm that that will indeed be Ofwat's position; the hon. Gentleman is right to raise the matter. The new clause makes Ofwat's legal position clear, and also puts in place a positive expectation in respect of social tariff schemes. Ofwat must work with the wider consumer base to make sure that the schemes are appropriate, and must not reject them out of hand. The difficulty that Ofwat used to face was quite understandable: even with the existing guidance, it did not feel that there was sufficient clarity in the law.

Elliot Morley: rose-

John Redwood: rose-

Huw Irranca-Davies: I shall give way first to my right hon. Friend the Member for Scunthorpe (Mr. Morley), and then to the right hon. Member for Wokingham (Mr. Redwood).

Elliot Morley: I too welcome the new clause, because we need to clarify social tariffs on water use. Indeed, we have a social tariff structure on energy use. My hon. Friend will agree that a lot of work has been done on this subject through reports that he has commissioned and by bodies such as the Consumer Council for Water, but the public need to be fully consulted, so I would be grateful for some assurances about that.

Huw Irranca-Davies: Entirely. That is exactly why we have introduced the new clause in its current form. In effect, we are taking a power that, although tightly drafted, still allows us to go out to full consultation, bring forward the underpinning regulations and guidance and make them fit for purpose. We do not want to pre-empt Anna Walker's package of proposals, as I made clear in Committee, but we might not have this opportunity again for a couple of years-who knows? In which case, we should introduce the measures now, so that we can move ahead.

John Redwood: In appraising the proposal, it is crucial that we know how the Minister defines people
	who would have difficulty paying.
	Cross-subsidy might be involved, and we want to avoid the pretty poor cross-subsidising the even poorer, so it is important that we know where he is minded to draw the line.

Huw Irranca-Davies: The right hon. Gentleman makes a very good point, but that is absolutely why the Bill should not include specific definitions of who does or does not fall into that category. That is exactly the purpose of going out to proper consultation-so that those terms can be defined and we can accurately reflect not only how those individuals or households are defined, but how such definitions in a local area tie in with complementary national schemes.
	The new clause would also enable the Secretary of State and Welsh Assembly Ministers to issue guidance to undertakers. That would set out which groups of customers we might expect to benefit from social tariffs-the very point that the right hon. Gentleman made. It would also set out the need for detailed impact assessments and consultation with customers and the Consumer Council for Water to determine what might be an acceptable cross-subsidy. We expect Ofwat to ensure that schemes are consistent with the guidance that we will issue.
	New clause 16 would require each water undertaker to invest in the training and development of its work force, and to include that in its 25-year strategic plan. There is a laudable intention behind that proposed change, and I shall come to it in a moment. New clause 17 would give Ofwat a duty to promote the sustainable management and use of water, and to promote sustainability in the water management supply chain. It would also require Ofwat to publish a skills strategy and an annual report to Ministers on employment in the water industry.
	New clause 18 would introduce a number of additional primary duties for the Secretary of State-or, as the case may be, Ofwat-when regulating the water industry. New clauses 16 to 18 have laudable intentions, but I said in Committee that they were unnecessary, and I shall expand on that, because it is worth elucidating on the Floor of the House the reasons why that is so.
	I said in Committee that when we take all those aspects into account, a review of Ofwat in some form is justified, and I shall consider how best to take that forward. I made that commitment in Committee, and I stand by it. In its inquiry last year into the 2009 price review, or PR09, the Environment, Food and Rural Affairs Committee recommended a fundamental review of Ofwat's role-and I neglected to thank the Committee for its work on all aspects of the Bill. Such a review would, of course, need to look at social, environmental and economic considerations across the board, not just the themes outlined in those three new clauses. There is a strong justification for such a review.

Linda Gilroy: Will my hon. Friend consider whether that review might cover mergers? Water companies are not currently allowed to merge, but they might be, and although there can be problems with mergers, some could bring significant benefits to consumers.

Huw Irranca-Davies: That is a helpful intervention, and I take my hon. Friend's point on board. In defining the review's terms of reference, it will be important not only to make them narrow, but to ensure that they encompass the changing situation in the water industry. We might well consider the aspect to which my hon. Friend refers. I cannot give her a cast-iron guarantee, but if we are going to think about a fundamental review, let us think about a fundamental review in all its aspects.
	As I have said, there is a strong justification for carrying out a review. When the water industry was first privatised, the role of the economic regulator was primarily to ensure that companies fulfilled their functions and extracted efficiencies from the industry. However, social and environmental issues such as climate change and the affordability of water have become much more important in the past 20 years, and water companies face new challenges over the sustainability of water supplies. That said, I hope that hon. Members will accept that the primary responsibility for work force planning and development sits with the water companies. As part of its 2009 review of water price limits, Ofwat required companies to develop a 25-year long-term strategic plan called a strategic direction statement, as well as a more detailed five-year business plan that included specific investment proposals for 2010-15. For the first time ever, that puts the period 2010-15 into a much longer-term context.
	The Government also have a role in supporting companies in looking to the long term. In particular, Energy and Utility Skills, the sector skills council, works with the water companies to identify the skills needs of the sector and to develop a strategic approach to addressing any gaps. It also develops vocational qualifications with water companies, and relevant skill-based training programmes with training providers. In July 2009, as part of the Government's re-licensing programme of all 25 sector skills councils, it was announced that EU Skills was not only successful in being re-licensed but judged to be outstanding. However, it was also noted by the National Audit Office that engagement with the water sector was not as strong as that with the gas and power sectors, which also fall with EU Skills' remit. In my view, it is crucial that all parties work together to ensure that the water sector is able to meet future challenges. I urge water companies actively to work together with EU Skills-I will play my part as well-to identify where the skill gaps are and to work up strategies to address any shortfalls.
	In relation to putting new duties and responsibilities on to Ofwat, I emphasise that Ofwat's current duties already require it to contribute to sustainable development. The new duties proposed in new clauses 16 to 18, such as those on investment and training, employment, job security and skills, leakage control, and the sustainable management and use of water, would sit alongside Ofwat's other primary duties. While we recognise the importance of all the issues identified in the new clauses, not least skills and training, it would not be right for these topical issues to be placed alongside existing primary duties involving high-level and strategic concerns about protecting consumers and ensuring that companies carry out their statutory functions. Nor should they be placed above the secondary duties that encompass much broader aspects of water regulation, such as sustainable development and better regulation in water efficiency. For example, it is unthinkable that Ofwat would not consider issues surrounding sustainable water management, or energy and water efficiency and leakage control, when considering its sustainable development duty. Similarly, work force issues should be taken into account when considering duties involving efficiency and meeting statutory obligations.
	I also note that Ministers already have the power to issue social and environmental guidance to Ofwat to underline the importance of the types of issues identified in new clauses 16, 17 and 18. Guidance was issued by DEFRA in September 2008 and by the Welsh Assembly Government in February 2009, including guidance on sustainable development and on environmental policies such as water efficiency, water quality and climate change.

Linda Gilroy: I thank my hon. Friend for being so generous in giving way. He was kind enough to attend a reception about innovation in the water industry. Is he confident that there are sufficient powers available to the regulator and to the Secretary of State to direct the regulator to ensure that there is sufficient innovation in the water industry?

Huw Irranca-Davies: Indeed there are, but that should be considered as part of the review of Ofwat's powers and duties. We also have to make good not only on Anna Walker's report but on what might come out of the Cave report. There is unfinished business in driving forward innovation in relation not only to efficiency but to tackling the carbon footprint of the water industry and so on. My hon. Friend makes a valid point.
	As I said, I believe that there is a role for Government. I have recently met unions such as GMB, Unison and others, and of course EU Skills, the sector skills council. There is merit in asking whether the guidance should cover the Government's expectations for the training and development of the work force in the water sector. I can tell the House that I intend to meet my hon. Friend the Minister for Further Education, Skills, Apprenticeships and Consumer Affairs, a near neighbour of mine in south Wales, to discuss the matter and consider what further steps we might take to address the skills gap in the water sector.

Lembit �pik: I thank the Minister for his generosity in giving way; it just so happens that the three key points that I want to make are on this group .
	The Minister rightly talked about the importance of having a holistic or strategic approach to sustainability and water management. It is clear to me that in Montgomeryshire, where the source of the River Severn lies, there is an interrelation between Ofwat's responsibilities and those of the Environment Agency, and sometimes there can be a conflict. For example, the level of water needed in the reservoirs to ensure that we do not get a drought in the summer can cause overflow in the winter. Does the Minister have a perspective on that, or would he like to write to me to explain how the Bill will ensure that there is a holistic approach to the potentially conflicting interests and needs of Ofwat and the Environment Agency?

Huw Irranca-Davies: I do not think I need to write to the hon. Gentleman, because I can happily confirm that one of the prime aims behind the Bill is the clarification of responsibilities, both for the EA as the strategic national lead and for upper-tier or unitary local authorities, working hand in hand with internal drainage boards and those on the ground in lower-tier authorities, so that they can deliver local leadership and accountability on flood risk management. Those organisations have duties to work with each other and with all the other authorities-duties that are embedded as a prominent part of the Bill.
	Amendment 22 to clause 43, on concessionary schemes for surface water drainage charges for community groups, would require an undertaker's charges scheme to be overseen by Ofwat. The Water Industry Act 1991 already requires water and sewerage undertakers in England and Wales to submit their annual charges schemes to Ofwat for its approval, and that holds true regardless of whether they include a concessionary scheme for community groups. Including a provision in clause 43 stating that the charges scheme must be overseen by Ofwat would simply add ambiguity, as it is not exactly clear what Ofwat is being asked to oversee, or how that would differ from the power that Ofwat already has to approve undertakers' charges schemes.
	That said, I appreciate that hon. Members of all parties want to be confident that community groups will not face unaffordable water bills as a result of site area charging for surface water drainage. I also recognise that there is a clear role and responsibility for Ofwat in ensuring that that is the case. The issue will therefore be addressed in the Secretary of State's guidance to undertakers.
	Clause 43(6) empowers the Secretary of State and Welsh Ministers to issue guidance to undertakers, to which they would be required to have regard. A draft of that guidance, which will be subject to full public consultation, was made available in Committee. It set out in quite some detail the Government's thinking on issues such as the need for concessionary schemes, which groups should benefit and what counts as an affordable charge for community groups. I bring to hon. Members' attention paragraph 3.1 of the draft guidance, which states:
	The Government is clear that it does not want to see community groups facing unaffordable increases in their water bills as a result of site area charging for surface water drainage. We expect undertakers to ensure that this is the case and Ofwat will ensure that undertakers have had regard to this guidance in its approval of individual charges schemes.
	That makes clear the important role that Ofwat will have both in approving individual charges schemes, as it does now, and in policing the Government's guidance to ensure that community groups will not face unaffordable surface water drainage charges.

Michael Penning: May I be assured, from what the Minister has said, that groups in my constituency are safe, particularly scout groups, which are very worried about whether they can survive when the charges go up?

Huw Irranca-Davies: Yes, the hon. Gentleman absolutely can have that assurance. We hoped that we would be able to ensure that without legislation, because we already had some guidance in place, but the Bill will provide clarity that schemes need to be worked up across the consumer base. I had an interesting discussion with church groups about whether we should protect churches to the extent that parishioners come in and say, Thanks very much, but my bill's just gone up £10 or £20 to save you. We need to get the balance right, but the joy of the scheme is that it will have proper local consultation, with proper input from the Consumer Council for Water, local groups and others, so that it is applicable to the local environment. That is a clear responsibility.
	Hon. Members can take that assurance back to the churches, scout groups, community halls and others, and tell those organisations to look at the guidance, which is out for consultation, and get their feedback to the Government. I am confident that that sets the way forward so that such groups, which often live hand to mouth, do not use their money and fundraising to pay for surface water charging rather than other things, such as taking scouts on a trip.
	To sum up, the objectives of new clauses 16, 17 and 18 can clearly already be achieved within the existing framework. Given the clear commitments I have made, I hope hon. Members will not press them to a Division. I also hope that the hon. Member for Cheltenham (Martin Horwood) will not press amendment 22 to a Division, given that Ofwat already has the power to approve charges schemes, and in view of the proposals in the Secretary of State's draft guidance on concessionary schemes for community groups.

Anne McIntosh: I echo the Minister's comments-I am delighted to be at the remaining stages of the Bill, and I hope we can reflect the co-operation and good humour that was enjoyed in Committee.
	New clause 18 is consequential on a number of amendments to which we will speak later. We had some sympathy with new clause 17, in the name of the hon. Member for Stroud (Mr. Drew), which is similar to our proposal, but we believe that our expression and script is clearer.

David Drew: Surely not!

Anne McIntosh: I hope the hon. Gentleman agrees.
	Basically, as the Minister said, the Select Committee on Environment, Food and Rural Affairs said in its report that we would need to revisit the regulatory framework for a number of issues that arose in Committee. In new clause 18, we are seeking to add a number of responsibilities that we believe should be specified in the Water Industry Act 1991 to reflect the changes that the Bill makes. Currently, those responsibilities are omitted from the Bill and the Act. I hope that the Minister and the House look favourably on those remarks.
	The Minister said that Government new clause 22 was an opportunity to give Ofwat a role in approving or rejecting the charging scheme, and ensuring that decisions are commensurate with the guidance to which he referred-I should state that that guidance was drawn to the Committee's attention on the penultimate day of our proceedings. What consultation has there been on that guidance? Previous guidance was heavily consulted on. Will he ensure that decisions will be taken with that guidance in mind? What direct consultation has there been with Ofwat?
	My hon. Friend the Member for Arundel and South Downs (Nick Herbert), the shadow Secretary of State, and I have mentioned on a number of occasions on public platforms that we have serious concerns about affordability. We believe that regard should be had to the Walker report. If it is the wish of the British people that there should be a Conservative Government, we would be committed to introducing a White Paper, as the Minister is aware, to consider both the Walker report and the Cave review in the round-particularly the former-as regards metering and affordability.
	We are a little dismayed that the Government have lifted one specific concern about social tariffs and affordability-we recognise that it is a very real concern-because it looks suspiciously like a piecemeal approach. Affordability is best seen in the context of areas such as the south-west, where 40 per cent. of water consumers are on low incomes, spending more than 3 per cent. of their disposable income on water, which is the general classification for water poverty. We wish to be as vigilant about water poverty as we are about fuel and energy poverty. I remind the Minister that while the Energy Bill includes social tariffs, with which we also have some sympathy, the energy sector had a two-year consultation under a proper framework set out in legislation. It was transparent and equitable, and all parties were fully consulted.
	We are also interested in the position of the Liberal Democrats, because they have flatly stated that they are against any form of stealth tax, and we are also on the record as opposing stealth taxes. However, new clause 22 will leave open the possibility of, for example, a hotel tax that is a real blight on hotels, especially in the south-west, which has the greatest problems of affordability.
	I wish to press the Minister on why the Government have picked on this aspect of social tariffs when there are many others. They had the opportunity to introduce a fuller water Bill. Indeed, it was not until the Opposition pressed the issue that the Government said that they would introduce a broader Bill, but they have taken many aspects of the draft Bill out at this stage. The Select Committee clearly concluded that they were right to do so, because, as we have said, we need to see a White Paper and a water Bill, along the same lines as the previous Conservative Government's legislation, which set the framework for the next 20 years. What are the Government thinking and why have they cherry-picked this issue out of the Walker report, the Cave report and the price review 2009? The Select Committee's conclusions also considered a broader role for Ofwat. Our concern is that this could lead to a bad law, the impact of which has not been properly assessed.

John Redwood: Has my hon. Friend considered how the introduction of proper competition into the water industry, for retail as well as for large customers, would solve many of the problems and probably bring prices down without a Bill?

Anne McIntosh: I am grateful to my right hon. Friend for that comment. We are doing some serious work in that regard. We have had some meaningful discussions with the authors of the two reports. We need to take a longer-term view, and that would be part and parcel of the White Paper, but it certainly could have a positive impact on bills.
	New clause 22(2) clearly states that subsection (1)
	includes schemes which have the effect of subsidisation by other persons.
	We know that that has the particular legal meaning of person and means companies as opposed to individuals and households. Why has the Minister excluded reference to households? He clearly set out that the Government intend a form of cross-subsidisation, but why open that only to companies? What level of advanced consultation has he had with companies about the fact that businesses might be seen to be subsidising individual households having difficulties paying? If the new clause had retained the reference to individuals as opposed to legal persons, the domestic households sector would have been restricted in that regard.
	Under new clause 22, as drafted, businesses will be caught by the proposals to subsidise individuals having difficulty paying their bills. As I mentioned, that might be viewed as a stealth tax on business-it could be so used-and, in the current economic climate, could lead to a financial burden on business. What were the Government's considerations in that regard? Is the Minister really considering doing what other European Union countries have done-imposing an eco-tax on hotels? What is their thinking on that?
	As I mentioned, we would have been more persuaded had the Minister gone down the route of the Energy Bill, which gives enabling powers to allow suppliers to provide social price support. Those proposals have been extensively researched and developed over time, and I understand that significant consultations with the parties involved have taken place and that the proposals in the Energy Bill have broad support across the sector. However, my concern is that, in introducing new clause 22 at this stage-perhaps pre-empting a subsequent White Paper and a broader water Bill-the necessary consultations have not taken place. I understand that we are positioned between two extremes, but would he be good enough to tell us the Government's thinking behind that.
	I want to press the Minister further. There are significant differences-more than innuendoes-between new clause 22 and the language in clause 43 on community groups. In new clause 22(3), Ofwat is given specific duties to allow concessionary schemes for domestic properties. Clause 43 does not do that, and instead leaves it to guidance for Ofwat to be given specific authority. There seems to be a difference there. Will he explain his thinking behind that? New clause 22(4) states that Ministers must issue guidance relative to subsections (1) and (2), whereas clause 43 states that only undertakers
	shall have regard to any guidance issued by
	Ministers, which appears to remove any compulsion for guidance to be produced. Is that an intended difference? Will he explain the Government's intention in that regard? Finally, new clause 22(5) states that undertakers and the authority shall have regard to the guidance, whereas in clause 43, only undertakers, and not Ofwat, are told to have regard to the guidance. Having achieved what we have achieved in clause 43, we would like to be satisfied that new clause 22 will not result in any consequential differences.
	I hope that the Minister and the House will look favourably on new clause 18, because we believe that it is appropriate to set out what the primary duties on the Secretary of State and Ofwat should be. As I said, there are significant consequences for later amendments. We have sympathy with the Government's new clause 22, but obviously we would like some satisfaction regarding our concerns. In the current credit crunch and economic crisis, the issue of affordability needs to be addressed. However, we would be interested to know why the particular issue in new clause 22 has been lifted from the other significant issues-my right hon. Friend the Member for Wokingham (Mr. Redwood) identified them-that were taken out of the earlier draft Bill.

Martin Horwood: I would like to start by echoing the remarks of the Minister and the hon. Member for Vale of York (Miss McIntosh) about the positive atmosphere that prevailed in Committee. I share their desire to ensure that that positive and co-operative attitude continues.
	New clause 22 is certainly a positive place to start and is broadly based on the ideas behind our new clause 1 in Committee. We have been pleased to add our names to new clause 22 from the Liberal Democrat Benches, in that it seeks to do what we intended with our new clause. At a time of recession, when variable energy prices, potentially rising council tax bills and other things are hitting some of the most vulnerable and poorest citizens in our communities, it is only right that we should pay attention to their needs. We should also pay heed to the fact that the impact assessment on the adoption of private drains has suggested that water bills will have to rise. The Walker review highlighted the issue of metering and the disproportionate impact that it could have on some of our poorest citizens, who are the poorest water customers. It is therefore urgent that the matter be put beyond doubt, because it is possible that the numbers in so-called water poverty will rise.
	Water companies have struggled to introduce social tariffs, and that includes even Dwr Cymru and Thames Water, which have tried to do so over many years. The kindest interpretation of Ofwat's response to many of their approaches to try to introduce social tariffs is that it has struggled with the terms of its remit-I will put it no stronger than that. In answer to the question that the hon. Member for Vale of York asked, the reason why we need the proposal in legislation, and why it is a little special compared with the broad range of recommendations in the Walker review, is that not that many of Anna Walker's recommendations require primary legislation in quite the same way.
	There is clearly a problem, and it is one that is perceived to be connected with the general remit under which Ofwat operates. We heard in our evidence session about the need that had been identified to put the matter beyond doubt in primary legislation. There are not that many recommendations in the Walker review that require primary legislation, and there is certainly not general support for that primary legislation should it derail the Bill before a general election. We also share a desire to get the Bill through before the general election, and new clause 22 seems a good opportunity to tackle the issue in a way that will have general support.
	New clause 22 puts the legality of social tariffs beyond doubt. The Secretary of State has drawn the new clause widely. It is not prescriptive and does not pre-empt the consultation that will result from the Walker review, but it does address Walker's call for social tariffs to be permitted. The Conservative Front-Bench team did not feel able to support our amendment in Committee to allow, in effect, lower water bills for the poorest customers, and the hon. Member for Vale of York has made some slightly grudging comments this afternoon. I do not think that social tariffs for poor water customers are likely to be confused with stealth taxes. I hope that she will feel able to allow the Conservative party to go a little further this evening and support this important new clause. The central issue is fairness to some of our most vulnerable citizens, and in particular for elderly citizens on fixed incomes for whom such bills are unavoidable, who find it difficult to respond to rising bills.

John Redwood: The issue is the level of income, because I cannot persuade my fairly poor constituents to have a big increase in order to pay for somebody else.

Martin Horwood: The right hon. Gentleman makes a fair point. Some of the figures put forward by Thames Water, which I can share with him another time, suggest that the number affected is a small percentage of the overall total. That means that if the money was to be recovered through other people's water bills, the increase for everybody else would be miniscule in practice, so the slightly poor would not have to pay an undue amount in order to subsidise the very poor. However, he makes a fair point. The key issue with new clause 22 is the need to put the legality of social tariffs beyond doubt. While we have the Bill before us-what the Minister said is quite true: we might not see another water Bill for some years-new clause 22 is a timely amendment.
	New clauses 16 and 17 cover issues that we discussed in Committee and on which the hon. Member for Stroud (Mr. Drew) had Liberal Democrat support. The new clauses would ensure that the management of flood risk and water management are sustainable not only in environmental terms, but in social and economic terms, and that we have the skill sets to maintain the duties that we are creating in the Bill.
	These and many other amendments have dealt with Ofwat's remit. I note and welcome the Minister's acknowledgement that Ofwat's remit needs comprehensive re-examination. That view is shared by all political parties. Whatever the outcome of the general election, it will be an important issue for the new Government to address. Time is not on our side, so while we have the Bill before us, it seems sensible to make these amendments. I hope the Government will accept them, despite the Minister's comments so far.
	In the growing spirit of cross-party solidarity, I welcome new clause 18. We have argued consistently for the reform of Ofwat's remit, particularly to reflect some of the issues that are addressed in the new clause, which include sustainability, water and energy efficiency, and leakage control not simply as a function of the economics of water companies, but as a desirable end in itself. That is a helpful amendment and again we are happy to support it.
	On our amendment 22, I know that hon. Members in all parts of the House were concerned about the so-called rain tax afflicting groups such as churches and Scout organisations, and that everybody wanted the problem resolved. The Bill has gone a long way towards that by introducing concessionary charging schemes for community groups. The discussion was helpful in raising the issue of social tariffs generally and making it clear that we could bring those into the Bill as a whole, but as the hon. Member for Vale of York said, it has highlighted an anomaly between two sets of clauses. In new clause 22, water companies must have regard to ministerial guidance, and subsection (5) subjects Ofwat to the same regime, yet in clause 43, which refers to the concessionary charging schemes for community organisations, there is no mention of Ofwat at all.
	That has raised legitimate concerns from some of the organisations affected by the so-called rain tax issue. The Scout Association wrote to me:
	Ofwat is specified as having oversight of the process, but the Scouts believe that Ofwat needs clear guidance on the face of the bill from Government as to its oversight of concessionary schemes. Ofwat's track record in interpreting existing guidance, and its inability to conduct a regulatory impact assessment before recommending site-area charging, has engendered significant mistrust in their regulatory competence-
	the Scout Association's words, not mine. It goes on:
	Therefore, we believe that either through passing this amendment, or giving other assurances at Report Stage, the Government ought to let community groups know that Ofwat will be in charge of administering all concessionary schemes as a matter of course.
	I note the Minister's comments. He said that there was a need for confidence in site area charging and that there was a clear responsibility on undertakers to pay attention to the need for concessionary schemes, but his comments still seem to fall short of an explicit reassurance that that will be part and parcel of Ofwat's role, and that we will not find that ministerial guidance is not quite explicit enough, and that water companies try to introduce a concessionary scheme explicitly to address the needs of community groups but find Ofwat quibbling about it or standing in their way. We are close to having that assurance, and I am sure the Minister can find a form of words that might satisfy us. We will take his word on it-I am tempted to use the phrase, Scout's honour. If he finds the right form of words, we will not press amendment 22 to a Division.

David Drew: I am delighted to speak to new clauses 16 and 17. In the spirit prevailing in the House today, I commend my hon. Friend the Minister on a near-exemplary performance and his willingness to listen, respond and improve the Bill. The House heard it from me first.
	I do not intend to spend long dealing with new clause 22-or, indeed, amendment 22-but I would like to point out that the new clause exemplifies the Minister's willingness to engage in debate. Some of us were tempted by the Liberal Democrat amendment moved in Committee, but common sense prevailed and we did not have a vote; the Minister was tasked to go away and think about how to introduce individual social tariffs as well as collective ones for voluntary organisations and so forth. That was the nub of the problem. It was not possible to say that we would treat fairly organisations such as the Scouts, important though they are, but have no willingness to understand the problems of individual customers. We are talking about some form of cross-subsidisation. As I said in Committee, we have to separate out those who cannot pay from those who will not pay-a growing problem in this industry.
	I hear what the hon. Member for Cheltenham (Martin Horwood) says about amendment 22, and I am pleased that he is not going to press it to a vote, but I seek further clarification of whether there has been some narrowing of the methodology that Ofwat will be asked to operate in dealing with cases referred to it where organisations feel that the water company they are paying is being unduly harsh in the charges imposed on them.
	I hope that the Minister will clarify the position in his summing-up as we have to nail this issue. He has done invaluable work on a thorny problem, but I hope that we can now move on and be absolutely clear that there is a mechanism whereby if a particular community group feels that it is being unfairly treated, it will have the wherewithal to go to Ofwat, complain and get some action against the relevant water company, particularly given the strong differential between different water companies, as I mentioned in Committee. If the Severn Trent model had been more widely followed, for example, some of the problems that we saw with United Utilities could have been overcome far more quickly.
	In being tabled at this time, new clauses 16 and 17 in no way move away from our discussions in Committee. However, new clause 16 lays down clearly a duty on the industry to provide skills and training for those who work in it. If I remember correctly, I heard the Minister rightly say that the water industry is not as advanced as the energy or other utility industries in respect of what it already does in that regard. New clause 16 is effectively designed to inform the regulator that water companies will have to demonstrate in detail how they are investing in the training and development of their employees.

Roger Williams: I am very much in favour of the hon. Gentleman's argument, but if we take Welsh Water, for instance, which I believe has a good structure, it has hardly any employees at all, as nearly all its work is contracted out. How will his proposals work out for an organisation like Welsh Water?

David Drew: That is a particular problem. We have seen contractualisation in all manner of industries, and I always think that the greatest loss is the human capital. What training is going on, who is responsible for it and, if it is not going on, what can be done about it, are issues that are not easy to determine. Given that I am unlikely to push the new clauses to a vote, I hope the Minister has noted that we want clarification of how the arrangements will work in practice. The water industry is a people-oriented industry, and we shall all be the losers if we do not invest in the people who will keep the water flowing.
	I should like the water companies to give the regulator details of their total annual investment in the training and development of their employees, details of compulsory employee training and development plans for each successive five-year regulatory period-clearly a long period will be involved-and details of consultation and negotiation between the undertaker and employee representatives on training and work force development strategies. I make no apology for saying that those proposals are a result of my links with Unison, the major trade union involved in the industry. Let me pass on Unison's thanks to the Minister, who met its representatives, allayed their fear that the Bill would make no provision for training and another opportunity would be lost in an area that had been sadly neglected, and agreed that we must be much clearer about the skills and development programmes that we intend to provide.
	Government, the water industry, the employees and the regulator must sing from the same song sheet if we are to have an industry that is fit for the 21st century rather than one that is somewhat historic, both in terms of the infrastructure that we are trying to upgrade and in terms of its failure to invest in people.
	New clause 17 also concerns skills training. I was a wee bit disappointed that the hon. Member for Vale of York (Miss McIntosh) felt that her new clause was so superior to mine that I ought to fall on my sword and accept failure. However, I tabled my new clause for a specific reason. I have been talking to the Environmental Industries Commission. As well as containing some nice words about sustainability and the need for a programmed approach to our ability to organise the industry, the new clause has a specific bite to which I want the Minister to respond.
	There happens to be an ABB plant in my constituency which produces flow meters. For many years, those at the plant have been telling me that the problem with the water industry and its five-year plans-the beloved AMP: no one has yet been able to explain to me what that acronym stands for, but I am sure that it stands for something meaningful-is that we may end up with feast and famine or, dare I say, boom and bust.
	During the years in which the industry has agreement on the new expenditure programmes, the supplier companies will be incredibly busy and have to break every record in responding to the demand that they find so difficult to meet. Towards the end of the five-year period, such will be the pace at which the industry has had to proceed that everyone will start waiting for the next five-year structured approach by Ofwat, and there will be very little work to go around.
	The aim of new clause 17 is to try to level out some of the activity, given that it is so unbalanced and leads to all manner of problems. As anyone who knows about the water industry will agree, that is entirely counter-productive in the long run. Therefore, I am looking for some assurances from my hon. Friend the Minister. We must consider how we can begin to deal with the problems of the vicious cycle of boom and bust to ensure that the industry can invest over the longer term. It should not think in terms of shorter five-year periods, which is, dare I say it, a drop in the ocean when we consider the history of how we have provided for the supply of water.
	We should consider how we can level out investment patterns to ensure that investment is not entirely dependent on the encouragement of the regulatory system; that we get proper operational efficiency within the idea of sustainability, which is where we link in with employee training and development; and that we make the best use of those assets. We will have situations where not just the supply chain but the industry itself will have surplus assets because they have worked so hard to get ahead of the game, but those will not necessarily be employed in the most purposeful way.
	I hope that the Minister hears what I say. There is a problem in the industry and we need to rectify it. I hope that we can use the Bill to at least have a debate on that matter. We may not need to have such a measure in primary legislation, but we need to recognise the problem and try to do something about it.

John Redwood: I rise to discuss Government new clause 22. As I have said in interventions, we all feel well disposed and warm towards the aim of more affordable water for people on lower incomes, but I find it difficult to welcome the way in which the Government propose to do that, as we need some indication of the detail that needs to follow to make this a sensible and workable scheme.
	The best way to make water more affordable for those on low incomes and for those on any kind of income is to introduce competition and get the costs of producing the water down. I believe that it would probably cut the cost by about a fifth if we introduced comprehensive water competition and used the pipe network as a common carrier. It is easy to do. It has already been done in the case of gas and other fluids requiring access to pipelines. There is no natural monopoly in the provision of water, the collection of water or the delivery of water. If there is any monopoly element in the provision of pipes, it can be dealt with quite easily by a proper common-carrier regulated system.
	However, those who are introducing the new clause need to give us more indication of how poor people have to be to qualify under it. It seems to be a cross-subsidy scheme. As the Minister has been gracious enough to accept, if the very poor are beneficiaries, everyone else could be losers. The Liberal Democrat spokesman suggests that it will not mean much of a loss for people on fairly low incomes because not many people would be helped by the scheme. That may be true.

Martin Horwood: I am sure that the right hon. Gentleman was listening carefully, but that is not what I said. I said that, because the subsidy was going to be spread across a very large number of people-in Thames Water's proposed scheme, the suggestion is that 95 per cent. would be subsidising and only 5 per cent. benefiting, although that might be a bit niggardly-that would mean a terribly small increase for everyone else. That is what I meant-that the moderately poor would have hardly any increase at all.

John Redwood: I think that that is what I said in slightly different language. I said that not many people would benefit. The hon. Gentleman is saying that only a very small percentage of people would benefit. However, I think that he will find that quite a lot of people think that their water bills are too high. It is not just the people on the lowest 5 per cent. of incomes who think that their water bills are too high. I suspect that perhaps half the people think that their water bills are too high and a lot of them will be very disappointed, so we need to send the right kind of signals if we are really talking about only 5 per cent.
	While the hon. Gentleman is right that, on the numbers, the increase for the other 95 per cent. will not be huge, there will none the less be some increase for people who are clearly really quite poor as they are in the bottom 6 or 7 per cent. of the income scale-because, on the hon. Gentleman's numbers, they will be excluded. We therefore need to have a better feel for the numbers before we can come to a fair conclusion on this; we need to know how big the increase will be, how many people will be paying it, and how many will benefit. I still think it would be much better to find a way of reducing the bills generally, as that would alleviate problems for the many people who find the water bill difficult to afford and feel that it has increased too much in recent years with no improvement in the service.
	I also wish to make a few remarks on new clause 18, tabled by my Front-Bench colleagues. It may be sensible, but both the Government and Opposition Front-Bench teams need to help me a little by explaining what they mean by sustainable water management. It is one of those phrases that people trot out; they say, Wouldn't it be a good idea to have sustainable water management? It is very difficult to say, No, we don't want that, as nobody wants unsustainable water management, but we have to unpack this common jargon and explore what it means. If it means we are going to have some common sense on the provision of clean water in adequate quantities at all times of the year and in all years to my constituents, I would welcome that. If it means that the water companies will do rather better in handling the disposal of foul water than at present, which would also matter a great deal to my constituents, I would welcome that very much, too.
	Let me offer one of quite a few possible examples of poor water service in my constituency from the main monopoly provider. There is an area of nice housing where there has been over-building on floodplain land. That has led to too much surface water, which the drainage system cannot handle, so the surface water rushes through the housing area, hits and knocks out the pumps that are meant to take the foul water safely underground, and the foul water then swells up from underground and mixes with the surface water already running around in this low-lying housing area. As a result, people have very unpleasant things coming into their drawing rooms and kitchens, and they then cannot live in their houses for the next year while they are being cleaned out, dried out, re-plastered and so forth. That is totally unsatisfactory in 2010 in the United Kingdom, which is meant to be a rich and caring country with lifestyles of a sensible level.
	If having sustainable water management means stopping such things happening, and saying to companies that allow them to happen, You have some responsibility and you need to come up with solutions more urgently out of your rather generous cash flows and large capital programmes, I am all for having sustainable water management. I suspect that this is what a lot of Members would find that their constituents want. They want more than the sensible and fine words in these various new clauses; rather, they want to know that something will actually happen. That is why I say this could be a very good idea, and I welcome what my Front-Bench colleagues are trying to do, but it can work only if the Minister both agrees that it is a sensible idea and then puts the detailed provisions into the regulations, so that monopoly local providers are under an obligation to deal with the obvious offences that we see in the service they are delivering.
	The water industry as a whole has all the characteristics of a monopoly provider. Were we to have three dry and hot summers in a row-oh, blessed memory, when we had such things-I am sure that we would run out of water very quickly and be told we had to kill all our plants in our nice gardens because we could not afford to water them any more. That should not happen. These companies should be able to handle such weather conditions. Above all, however, they should be able to handle conditions in which we have quite a bit of rainfall. This country has had a lot of rainfall over many years; we seem to be having a succession of wet and damp winters and summers at present. Companies should be made to organise things so that they are able to handle such eventualities, because if customers cannot switch to another company that will do the job properly, it is terribly important that there is a regulator in place that will take the necessary action. I therefore hope that if we are in favour of sustainable water management, that means we are in favour of tackling these problems vigorously and thereby giving reassurance to my constituents that they will not be flooded in future.

Linda Gilroy: I welcome the work that other Members have done in Committee and it is good to see the Bill back to complete its remaining stages so early, as that bodes well for its passing through the other place and into legislation. I particularly welcome the addition of clause 44, which fulfils the request made by a number of Members on Second Reading, including myself, for an examination of the debt issue. I shall move on swiftly, before I am told that this is not a Third Reading debate.
	I welcome the product of another discussion in Committee-the one on social tariffs-and the work that the hon. Member for Cheltenham (Martin Horwood) has done, alongside Labour Members, in promoting new clause 22. I understand that new clause 22 is modest in its extent-it certainly is as far as fulfilling the Walker review and meeting the challenges in the south-west are concerned-but it is more welcome than the somewhat curmudgeonly comments made by Conservative Members. It gives clarity to something for which there is a great deal of pressure. Legislation needs to provide the regulator, at an early stage, with the ability to allow water undertakers to introduce some of the novel ways that they have been trying out, so as to ensure that there are methods that allow customers in vulnerable situations and those under great pressure in paying their water bills to get back into payment habits, to stop building up debt and to contribute at a level that is possible for them.
	So, I welcome the work done in Committee, but I wish to seek an assurance from the Minister because this provision is modest. If my understanding is correct, it is simply an intra-regional arrangement, rather than an inter-regional one such as would be needed to fulfil some of the recommendations of the Walker review. I hope that its welcome inclusion in the Bill in no way diminishes the Government's commitment to examine the full range of measures that could assist in tackling affordability problems, which are nowhere more acute than in the south-west region, in which I live. The Walker report put on the record for the first time the fact that the extent of the under-investment in the region's sewerage at the time of privatisation in the 1980s was £650 million. This new clause will in no way begin to address that. I thus seek an assurance from the Minister, because I was slightly apprehensive about his comment that it could be another two years before we have this opportunity again.
	I welcome what the Minister said about the necessity for a review of Ofwat and its powers, and the way in which Walker envisages new charging and metering arrangements working would certainly bring that in its train. Indeed, I met the regulator earlier today to discuss how she is progressing with the Minister's welcome request for her to proceed with the examination of those aspects of the Walker review and the options that it set out for addressing the pressing affordability problems in the south-west. I am more convinced than ever that we will need a range of regulatory and Government measures, and not just the narrow ones envisaged in new clause 22, to put right this 20-year pain that we have been experiencing.
	I support the new clause, but I seek the Minister's reassurance that it does not diminish the Government's appetite for introducing further early proposals to implement other necessary aspects of the review.
	I want briefly to touch on new clauses 16 and 17, tabled by my hon. Friend the Member for Stroud (Mr. Drew). The Minister's comments on the skills issue were very welcome. Notwithstanding the contribution that Unison has made to putting this on the agenda, he and I met some GMB shop stewards in a meeting that was lively for both of us. I was there in my role as chair of the all-party group on water. We were challenged to do things that I do not think we would begin to consider, such as addressing the skills issue by renationalising the water industry.
	One had to have considerable sympathy with the views that they expressed. They were worried about the pressures arising from what is broadly seen as a pretty tough settlement in PR09. They were also very worried about the investment in skills, development and the work force when everything else gives, in some companies more than others. I welcome what the Minister said and his assurances that that issue was on his agenda and that he was talking to the Minister for Further Education, Skills, Apprenticeships and Consumer Affairs. However, although I am hopeful that we can better align these issues, as has been done in the energy industry-I have seen some very good work done along these lines-if that does not happen the early advent of another water Bill will keep the minds of people who are in charge of the water undertakings focused on getting a move on. Otherwise, some of us will hope to be in a position to bring forward some further thinking along the lines set out by my hon. Friend the Member for Stroud in new clause 16.
	As my hon. Friend said in his remarks on new clause 17, innovation is important in addressing some of the drought problems confronting the industry-not, perhaps, in the part of the country that I come from, but in some of the more eastern parts of the country. On show in a reception in the House of Commons were some of the proposals that are coming forward. They require quite a lot of investment and certainty for a number of years ahead.
	My hon. Friend made points about the length of time involved and the periodic price review period, as well as about the way that that militates against such decisions being taken in a sensible way. In the all-party water group we have debated the impact of the welcome 25-year water management plans and the strategic statements that are now made, but we almost need more than that. There has been quite a lot of discussion inside and outside this place about whether we need perhaps to review the length of the price review period, which is five years, and about whether that is long enough. It has the perverse sort of outcomes that were outlined by my hon. Friend in his introduction of new clause 17. There would certainly have to be protections for consumers on pricing, but if we can get more sensible, value-for-money, long-term decisions in the investment procedure, that will pay dividends for consumers, too. It gives the water undertakings greater capacity to make sensible, value-for-money decisions. My hon. Friend described that as levelling out.
	In conclusion, we might want to return to new clause 17 in a future Bill, if note is not taken of it through the methods outlined by the Minister in his introductory speech. I greatly welcome new clause 22, and will certainly support the Government on it.

Nia Griffith: I rise to speak in support of Government new clause 22, which will enable water companies to operate social tariffs with the aim of reducing charges for individuals who would find it difficult to pay in full. It will make it clear once and for all, beyond any doubt, that Ofwat will have such powers. We are familiar with this concept from the similar system of having reduced council tax charges for low-income households. Hon. Members will also remember that in pre-meter days, water rates were strongly linked to household rates, so we understand the concept that, in an unequal society, this is one way of helping those on the lowest incomes to receive commodities such as water. Likewise, there are measures in the Energy Bill to tackle fuel poverty.
	I am very pleased that the Minister has been willing to listen to Members on this issue and to put this measure into the Bill. I know that things have been rather rushed and were done only just in time-after the Walker review came out, there were concerns as to whether the measure could be fitted in-but it is important to pass the measure, which mirrors measures in the Energy Bill and is similar to something that we already do with council tax.
	The new clause states that the Minister must issue guidance that includes the
	factors to be taken into account
	when water companies draw up such schemes. The guidance will then go to Ofwat. I understand that for Wales, Welsh Assembly Government Ministers will draw up the guidance that Ofwat will use when dealing with water companies that operate wholly or mainly in Wales, such as Dwr Cymru, Welsh Water. Will the Minister confirm that that is the case? I would like to ask a further question on that. We know that Dwr Cymru is extremely proud of the fact that, this year, it managed to give back to every household a dividend of about £21. That was quite controversial because many households did not really notice the difference. The poorest households noticed because that is an enormous amount to them, but the most well-off households did not necessarily particularly notice it. There has been considerable criticism that the money could have been invested in improving the sewerage system in places such as Llanelli, or in working towards the adoption of sewers with which there have been major difficulties in the past for local communities who have had to pay continually for repairs. This issue is controversial, and I would like the Minister to tell us whether the guidance from Welsh Assembly Government Ministers to Ofwat could include guidance on how to deal with dividends, or whether this issue can be decided only in advance in relation to charges. That would be of interest to the water rate payers of Wales. I look forward to the Minister's clarification of this issue. I strongly support the principle behind the new clause, and I very much look forward to its operation.

Huw Irranca-Davies: The debate has kicked us off very well indeed. As I expected, there has been a good debate on this part of the Bill. I shall try to deal in detail, but fairly rapidly, with some of the points that have been raised. I can give all hon. Members the assurances that they seek, including the right hon. Member for Wokingham (Mr. Redwood), who made a valid point about rushing ahead and whether we are pre-empting what might be the ideal. I think that I can give him the assurance he requires. I acknowledge that, as the hon. Member for Vale of York (Miss McIntosh) has commented, the measures on social tariff have come late in the day, and I shall explain why. I hope that I can persuade her to join us on this matter and approach it in the same spirit that we have dealt with the rest of the Bill, because we have an opportunity here.
	Let me deal first with the question of why now. The hon. Member for Cheltenham (Martin Horwood) talked about putting matters beyond doubt legally. That is the purpose of the measure, but this issue was specifically raised by Ofwat and others in our evidence sessions. In response to Committee members, they said that the impediment to moving on this matter was lack of clarity in the law. We knew that there was huge support for this approach in Committee, and my hon. Friend the Member for Stroud (Mr. Drew) was right to say that I am a listening Minister. It has been a struggle to bring forward a proposal in time, but I pay tribute to my Bill team, who worked very hard. They spoke to stakeholders outside the House to try to get this right, and I think that we have something good.
	I do not want to legislate for the sake of it, but I believe that our proposals are broadly welcomed. To pick up the remarks from several hon. Members, including Labour Members, I should like to bring forward legislation rapidly when we return after the general election, if I am in a position to do so, and we have an opportunity in this debate to achieve a consensus on the matter.
	Why are we including provisions on social tariffs and bad debts, and not other Walker review recommendations? The review was tasked with looking at a number of wide-ranging and complex issues, which meant that it was published later than we initially hoped. We are amending the Bill to include provisions to tackle bad debt and, because of concerns raised on Second Reading, we have also introduced this provision on social tariffs.
	The social tariff measure was a firm recommendation in Anna Walker's interim report, and her final report said that it should be a priority. This is a timely opportunity to include it because, as has been noted, we need to act soon to help customers who are already facing real hardship. However, other recommendations in Anna Walker's report, and the Cave report that I mentioned previously, require a lot of further consideration. I assure the House that we will consult fully on them. Although it is still the Government's intention to bring forward any new legislation that is needed, I should point out that not all the recommendations in Anna Walker's report require legislation.
	In response to the question about businesses, I want to make it clear that the present wording is quite deliberate. We have been working very hard and burning the midnight oil to get it right. As I have made clear, part of the mechanism is that water companies will consult their customer bases before any scheme is implemented. That consultation will have to cover the acceptability of any cross-subsidies, as our guidance will make clear. We will, of course, consult properly on that guidance in the first place.
	The right hon. Member for Wokingham quite rightly had reservations about whether this provision should be brought forward now, but it is framed in such a way that it does not pre-empt Anna Walker, or the detail inherent in a proper consultation exercise. I am sure that he would support the idea that we should consult not only those who might benefit, but people who might be asked to carry the burden.
	The Consumer Council for Water made its concerns clear, and we framed our approach accordingly. We are not setting out specific proposals now, but ensuring that we have the power to consult and bring in such proposals at an appropriate time.

Linda Gilroy: Will the Government take note of the work done by CC Water, in the context of the water review, to assess the extent to which people will tolerate some form of cross-subsidy?

Huw Irranca-Davies: I assure my hon. Friend that we will take that work into account. The council has done a very good sensitivity analysis of the extent to which people are willing to bear some sort of burden.
	There is one matter that I want to knock on the head. We had a very good debate in Westminster Hall the other day, when we discussed possibilities for dealing with the legacy issues in the south-west that arise from the original privatisation of the water companies. I said that the idea of a seasonal tariff was one of about six, seven or a dozen options, but it is not for me as a Minister to say that is the only one that we should take up. In fact, Anna Walker made it clear that a package of measures might need to be brought forward.
	Contrary to speculation in the  Western Morning News and other newspapers, I am not advocating any particular approach. We need a proper consultation with the wide consumer base before any measure is brought forward. No stealth tax is being imposed, and the fact that we are having this debate in full public view on the Floor of the House shows our desire to get the balance right.
	A few Members mentioned the Ofwat review, so let me reiterate what I said, because many of the proposed changes before us relate to Ofwat's remit. We absolutely acknowledge that we need to take a fundamental look at its remit so that it is fit to meet what are quite changed circumstances from those when privatisation occurred. We need to do so in recognition of the fact that the review must feature not only the proposed changes before us, but other contemporary and long-term issues. That is the appropriate way to undertake such work. Ofwat will do its own post-match review following PR09, but we need to engage not only with the regulator, but with wider stakeholders on a review of how we meet climate change and sustainability objectives. The right hon. Member for Wokingham was right to say that the proposed changes are well intentioned, and the definition of sustainable water management should indeed be part of that review.

John Redwood: I am very grateful to the Minister for being so helpful, but will he answer my query? Does the law as it stands place a duty on a water authority to deal with foul water that escapes and causes problems, or do we need to strengthen the law?

Huw Irranca-Davies: I shall return to that issue in a moment. I believe that such powers exist-not in this Bill, but under existing water industry legislation. However, I shall seek some inspiration to recall the exact Act.
	I hope that the hon. Member for Cheltenham will accept my assurance that we are seriously minded to undertake an all-encompassing review of Ofwat. Rather than try to include or identify in the Bill some of the issues that might be needed on Ofwat, however, we should do such work properly, in the round, and look at how we meet all the different challenges.

Martin Horwood: The explicit assurance that I and the Scout Association were looking for, however, was on the exercise of the remit in respect of the concessionary charges scheme. We want an assurance that Ofwat will clearly see that it is responsible for ensuring that the scheme is fairly applied to community groups.

Huw Irranca-Davies: The hon. Gentleman gives me the opportunity to put on record how we see the proposals working. Ofwat would be responsible for scrutinising and approving all charges schemes, and for ensuring that schemes complied with its price limits, were not unduly preferential or discriminatory, had regard to Government guidance, and protected customers. The proposals would make it clear in law that companies could bring forward concessionary schemes for community groups in their charges schemes, and Government guidance to companies would set out how we think those concessionary schemes would work. In approving the charges schemes, Ofwat would ensure that companies had regard to that guidance, and we would not expect Ofwat to approve a charges scheme that did not follow that guidance.
	It is not for the Government to tell individual companies how to structure their scheme for charges. Severn Trent is working very well, because it has come up with a scheme that responds to its local, wide-ranging customer base. If a Minister did that work, they would create not least some market uncertainty, which could ultimately push up prices. Severn Trent has run a successful concessionary scheme. Yorkshire Water has also already set fair and affordable area-based surface water drainage charges for its non-domestic customers, so in such cases it might not be necessary to introduce concessionary schemes. However, if companies are allowed such flexibility, they will be able to reflect the circumstances in their area.
	Let me make it clear that we will expect all companies that move to area-based charges, of which there are currently only four, to assess whether a concessionary scheme is necessary for their customers, and to ensure that community groups do not face unaffordable surface water drainage charges. Government guidance will make that clear, and I am sure that the hon. Gentleman will provide some input.
	Companies will decide which community groups are included in their concessionary schemes, although we have published draft guidance; the Government will provide guidance on the types of organisation that should benefit, and examples of best practice. I think that we got it right with the draft guidance that we supplied to the Public Bill Committee on its opening day on 7 January. The Chairman referred to the package of documents on the desk in the Committee Room. We expect companies to decide to which groups to grant the concession by assessing the benefit to the community, consulting their customers and undertaking an impact assessment. That will ensure that all such schemes are fair for all customers. The absolute assurance is that concessionary schemes will not be brought forward where there are issues of unaffordability for community groups, Scouts, churches and so on.

Martin Horwood: I hope that the House will forgive my pressing this point. In fact, just for once, it is not the ministerial guidance that we, and the Scout Association, are worried about. The concern is about whether Ofwat's remit will still conflict with this issue, and about the fact that Ofwat is not mentioned in the new clause. As long as the Minister can give the assurance that Ofwat will see it as its role to support the implementation of these schemes, we can all relax and attend our Scout events.

Huw Irranca-Davies: The answer is a straightforward yes.
	I was pleased to have a very productive meeting with my hon. Friend the Member for Stroud and members from Unison. I also met friends from the GMB with my hon. Friend the Member for Plymouth, Sutton (Linda Gilroy) and led a delegation with my right hon. Friend the Member for Makerfield (Mr. McCartney). We dealt with issues to do with skills within the utility sector and throughout the water sector.
	One of the problems with the water sector is that it is fragmented in comparison with the energy sector, for example, so there is a good role for somebody in bringing people together. That is why I want to seek a meeting with my hon. Friend the Minister for Further Education, Skills, Apprenticeships and Consumer Affairs to talk about how we can lend our weight to trying to get an all-encompassing approach, right down the supply chain and across the industry, so that companies do not have to struggle with a more piecemeal and short-term approach to skills development. EU Skills has been working with members of Water UK to develop a detailed and comprehensive work force planning tool. The key skills issue for the sector is the ageing work force; 11 per cent. are due to retire in the current regulated period, and increasing numbers in subsequent regulatory periods. We all have a role to play, and I will certainly play mine.
	My hon. Friend the Member for Stroud talked about the price review and about trying to flatten out some of the decisions on investment and, linked to that, skills and training. For the first time ever, we have the five-year PR09 in the context of a 25-year strategic direction statement to consider the long term as well. DEFRA and Treasury Ministers have encouraged companies to bring forward their expenditure early in the PR09 process, where that is in the interests of customers, in order to flatten out the traditional wave shape that we have sometimes seen. Let us not forget that PR09 allows for more than £22 billion of expenditure to 2015; that is good for jobs and leads to a need for skilled workers.
	In his introductory remarks, the right hon. Member for Wokingham expressed support for competition in the water industry to drive prices down. Many issues arise in a purely competitive approach. First, we are in a devolved situation. The right hon. Gentleman is a former Wales Office Minister, as I am, and he will know that Welsh Assembly Government Ministers have a key role to play, as does Welsh Water-Dwr Cymru-which has a somewhat different structure from other such companies. Although it is not without flaw, it is generally perceived in Wales to be a good model of a mutual approach towards water utility provision.
	The right hon. Gentleman also talked about the transfer of water. That is not an unfeasible engineering solution, but we need to take into account its carbon impact if long distances are involved. As he rightly said, sustainable water management, among other things, might well be a good idea, but let us do it within the review of the full role of Ofwat.
	To pick up the right hon. Gentleman's earlier point, I have had inspiration on where provision already exists on undertakers. Section 94 of the Water Industry Act 1991 requires undertakers to drain their areas appropriately, and Ofwat is required to ensure that they are able to fulfil those functions. There is also public health legislation and nuisance legislation, both of which would be relevant to powers to prevent and redress instances of local foul sewerage pollution. Having been on the receiving end of overflowing sewers, as I said in Committee, I have a great deal of sympathy with that issue.
	I turn to the comments of my hon. Friend the Member for Plymouth, Sutton. First, I welcome her work and that of other hon. Members in lobbying on the whole range of issues raised by Cave and Walker, in the south-west and more broadly. I hope that an additional Bill can be brought forward very soon, but we need to take this opportunity to act as well. We have made it clear that we will consult fully on Walker, but we have also already asked Ofwat to examine the recommendations in the report, not least in relation to the south-west, and to advise Ministers accordingly.
	I look forward to a rescheduled meeting with the Prime Minister soon, with my hon. Friend and other colleagues. As she rightly said, we need to find a solution to the problem in the south-west. Anna Walker has given us some useful signposts and pointed squarely to where the problem arose. It could have been sorted right at the beginning. My hon. Friend mentioned the long-term impact, and the 25-year long-term planning approach that we now have is a useful way forward.
	My hon. Friend the Member for Llanelli (Nia Griffith), alongside other Welsh colleagues, has been assiduous in lobbying to ensure that many of the measures in the Bill are also applied in Wales. I can confirm that Welsh Assembly Government Ministers will produce the draft guidance there. I hear once again her support for the transfer of private sewers, which is an issue that affects all of us in Wales. The Welsh Assembly Government have taken it forward in a slightly different way from that used in England, as we would expect, but as Welsh MPs we all have a role to play in getting involved in the process and ensuring that our constituents who are the most affected are the first to receive transfer where possible.
	The only matter on which I will disappoint my hon. Friend is that of whether the guidance can specify how dividends should be shared out. Dividends are a matter for each company, but of course Ofwat, in its overall regulatory role, takes account of the water companies' ability to fulfil their functions within the price-setting mechanism. Within the guidance under the Bill, however, dividends are a matter for the companies.

Daniel Rogerson: In considering how that framework will work, will the Minister also continue to consider how companies can transfer money within wider groups that they are part of? That is significant in some areas. It is not just about dividends for shareholders but about how funds are moved around within groups.

Huw Irranca-Davies: That is a valid point, and it is one thing that we will want to examine in considering the role of Ofwat.
	I hope that I have provided the necessary assurances. We are not pre-empting Walker, we are putting a mechanism in place so that we can deliver for the people who are hardest hit by affordability problems. We have already provided for what is set out in several of the amendments, and I have made clear my commitment to a full and comprehensive review of the regulator. That is not to say that its current role is remiss, but we recognise that the challenges that it faces now are significantly different from those at the time of privatisation.
	 Question put and agreed to.
	 New clause 22 accordingly read a Second time, and added to the Bill.

New Clause 2
	  
	Regular maintenance of water courses

'The Environment Agency must undertake a programme of regular maintenance work of major water courses on an annual basis with quarterly reports to both Houses of Parliament.'.- (Miss McIntosh.)
	 Brought up, and read the First time.

Anne McIntosh: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this it will be convenient to discuss the following: new clause 9- Staffing and resources for the Environment Agency-
	'(1) The Secretary of State must make an assessment of the staff, equipment and resources required by the Environment Agency to implement the provisions of the Act in accordance with the lessons learnt from the floods of 2007.'.
	New clause 20- The role of Fire and Rescue Authorities during major flooding-
	'(1) A fire and rescue authority must make provision for the purpose of rescuing people and protecting them from serious harm in the event of major flooding in its area.
	(2) In making the provision required by subsection (1), a fire and rescue authority must-
	(a) secure the provision of such personnel, services and training as may be necessary efficiently to meet all reasonable requirements;
	(b) make arrangements for dealing with calls for help;
	(c) make arrangements for obtaining necessary information; and
	(d) make arrangements for ensuring that reasonable steps are taken to prevent or limit damage to property resulting from action taken pursuant to such provision.
	(3) Where-
	(a) a fire and rescue authority maintains specialist resources (the first authority);
	(b) major flooding has occurred or is likely to occur in the area of another fire and rescue authority (the second authority); and
	(c) the second authority has requested the first authority to use those resources in the second authority's area,
	the first authority must use its specialist resources in the area of the second authority to such extent as is reasonable for the purpose of dealing with the emergency.
	(4) In this section-
	(a) major flooding means flooding that causes or is likely to cause one or more individuals to die, be seriously injured or become seriously ill as a result from-
	(i) natural causes; or
	(ii) an escape of water from a large raised reservoir;
	(b) specialist resources means resources maintained for the purpose of taking action pursuant to provision made in accordance with subsection (1) including any personnel who have received specialist training for that purpose;
	(c) large raised reservoir has the same meaning as in section 1 of the Reservoir Act 1975 (ambit of Act and interpretation).'.
	Amendment 24, in clause 6, page 4, line 37, at end add-
	'(g) the fire and rescue authorities.'.
	Amendment 25, page 5, line 9, at end add-
	'(e) a fire and rescue authority that exercises functions in relation to an area in Wales.'.
	Amendment 27, in clause 7, page 5, line 35, at end insert 'the fire and rescue authorities,'.
	Amendment 26, page 5, line 40, at end add-
	'(e) a fire and rescue authority that exercises functions in relation to an area in England.'.
	Amendment 5, in clause 9, page 7, line 42, at end add-
	'(10) The Minister shall as soon as possible instigate, publish and have regard to a review undertaken by a panel of independent persons pertaining to the-
	(a) recruitment costs which will be incurred by local authorities in implementing the provisions of this section; and
	(b) training and equipment costs incurred by local authorities in implementing the provisions of this section.'.
	Amendment 4, in clause 18, page 13, line 20, at end add-
	'(4) A report under this section must be laid before and approved by a resolution of each House of Parliament.'.
	Government amendments 31 to 34.
	Amendment 28, in clause 38, page 24, leave out lines 5 and 6 and insert-
	'(3) Condition 2 is that in carrying out the work the Agency-
	(a) has regard to the national flood and coastal erosion risk management strategy under section 7, and
	(b) does not create or increase potential harmful consequences of a kind listed in section 2(4)(a) to (d)'.
	Government amendments 48 and 49.

Anne McIntosh: I wish to make one or two general remarks at the outset before going through our amendments and those in the name of the hon. Member for Stroud (Mr. Drew), after which I shall allow the Minister time to make the case for the Government amendments, of which several have come at such a late stage.
	We had the opportunity to rehearse our arguments about the resourcing of the Environment Agency and local authorities at some length in Committee, but we did not receive the satisfaction and reassurances that we wanted from the Minister. I know that in relation to our amendments in this group, and even more so for those in the next group, he is hoping to give some reassurances that go beyond the Government amendments. If so, it would be helpful if he took the opportunity to state whether the discussions will be on the basis of Pepper  v. Hart, so that we can provide assurances to those outside. The Government amendments in this group may not rely on Pepper  v. Hart so much as those in the next group.
	I have a general point to make on the fire and rescue authorities, if I may, before I address the specifics of the proposals. In Committee, my hon. Friend the Member for Upminster (Angela Watkinson) made some logical points about the prominence of the fire and rescue authorities under the Civil Contingencies Act 2004, which the Minister addressed. I have some sympathy with the proposals of the hon. Member for Stroud and his hon. Friends, but without putting words into the Minister's mouth, I am sure he will agree that they would raise funding requirements. Nevertheless, there seems to be a lacuna in the law, in that we generally assume that fire and rescue crews will turn up and swing into action, as they did most recently in the Cumbria floods in November and December 2009, but there are resource issues with that, and I am not convinced the Government have yet addressed them.
	New clause 2 would place a duty on the Environment Agency to
	undertake a programme of regular maintenance work of major water courses on an annual basis with quarterly reports to both Houses of Parliament.
	In its conclusions, the Pitt report clearly stated-the Government adopted this in their most recent response-that regular maintenance should be done, and more importantly that it must be seen to be done. That is one of only a very few points of dissention that I have with Sir Michael Pitt. At the moment, I am not convinced, anecdotally, that the public believe that regular maintenance is being done. A number of people said that had regular maintenance been done, even the Cumbria floods might not have been as bad. I am not sure about that, because events that happen once in 1,000 years would lead to substantial flooding in any circumstances, but if regular maintenance on major watercourses is not done, water backs up into small watercourses.
	Following the 2007, 2008 and 2009 floods, I saw with my own eyes areas where regular maintenance had not been undertaken, where a fairly basic strip of self-planting willow trees could have reduced flooding. As we know, the internal drainage boards have a regular programme, but it is acutely worrying for landowners and those who contribute to IDBs, and to the work of the Environment Agency from the IDB budget, if major watercourses are not regularly maintained and if minor watercourses are flooded as a consequence.
	We are asking for work to be undertaken on
	an annual basis with quarterly reports to both Houses of Parliament,
	which could be debated and published. That would send the message that substantial maintenance was being done regularly.

John Redwood: That goes to the heart of a big problem in my constituency, where the rivers Emm and Loddon have flooded on all too many occasions in the past decade. Part of the problem has been the failure of the Environment Agency to maintain the free flow of the waters, which means blockages that exacerbate the flooding. I hope that my hon. Friend is successful with new clause 2.

Anne McIntosh: I am most grateful for that support from my right hon. Friend. There is an argument that the Government have reduced the maintenance programme while increasing along with inflation the budget for substantial infrastructure projects. Capital expenditure has been maintained and even modestly increased, but the same has not happened on the same scale with maintenance.
	New clause 9 would require the Secretary of State to
	make an assessment of the staff, equipment and resources required by the Environment Agency to implement the provisions of the Act in accordance with lessons learnt from the floods of 2007.
	We want a clear undertaking that the Pitt requirements will be met, and it is not clear that the Environment Agency will have any new resources. The report that was published last year on the Pitt conclusions included a table that did not show any significant resources for those purposes. I wish to press the Minister on where those resources will be found.
	Amendments 5 and 4 similarly seek resources for local authorities. Amendment 5 would amend clause 9 to require the Minister to set up an independent panel to review the recruitment costs of the new staff required by local authorities to implement these new provisions-and the training and equipment costs. Amendment 4 would require a report to be presented to Parliament and approved by both Houses.
	The Minister has failed to reassure us that adequate resources will be provided. We have been told that savings will be made, especially on lateral drains, but we have had a strong steer from the Local Government Association that these sums are wrong. The Minister had agreed, through his Department, a new burdens doctrine, but the resource implications of the Bill breach the spirit of that doctrine. Therefore, the Minister should use this opportunity to identify the new additional costs, how he proposes to meet them, and to confirm that they will not be met entirely from existing budgets so that local authorities will not lose funding for activities that they would otherwise wish to undertake.
	Water companies were also concerned by the suggestion from local authorities that the water companies should fund certain aspects from their receipts from consumers. I hope that the Minister will take this opportunity to give an undertaking that that will not be the case. It would be totally inappropriate and unacceptable, and not the best way to proceed.
	Amendment 28 sets out how the work of the Environment Agency should be carried out, with
	regard to the national flood and coastal erosion risk management strategy.
	It would also ensure that there were no unintended consequences from part 2 of the Bill.
	Through new clause 2, we are raising concerns about the extensive and prescriptive role of the Environment Agency; its ability to carry out work that could increase flooding; the erosion of the responsibility to take a balanced approach; and whether the work that the agency undertakes might unwittingly cause damage to human health, the economy, infrastructure or the environment. Is it right to give those powers to the agency, or would that role be better played by local authorities? That is part and parcel of our hope that such powers will remain with, or be passed to, local communities through local authorities and internal drainage boards as appropriate.
	Echoed within the group of new clauses and amendments is our concern about which should be the respective and potential local authorities. Without straying beyond the group, will the Minister confirm whether he is minded to provide the flexibility needed to allow district councils to be the proper planning authorities, if it comes to the approving authority for sustainable drainage systems? However, that debate might best be handled when we discuss the next group of amendments.
	With those words, I would like to move this little group of new clauses and amendments.

Mr. Deputy Speaker: Order. For the sake of clarification, may I say to the hon. Lady that she moved the new clause at the head of the group? Should there be a request for the House to express an opinion on any of the others, they will be moved formally at that stage.

Anne McIntosh: I am grateful for your guidance, Mr. Deputy Speaker.
	We have some sympathy with the amendments in the name of the hon. Member for Stroud and his hon. Friends, but they might go beyond the content of the Bill. There is clearly a legislative omission that he is trying to plug, but I wonder where he intends the resources to come from. I would be most interested to hear the Minister's response to our concerns about his amendments-technical amendments, as he might call them. Why are they coming so late in the day? However, if he is minded to support our amendments, that would be most welcome.

David Drew: I am delighted to speak to new clause 20 and amendments 24 to 27. I heard what the hon. Member for Vale of York (Miss McIntosh) said, and I shall try to assuage her concerns and explain why we do not think that the amendments go too far. More than anything, however, I hope that the Minister will listen to my remarks, and that if my hon. Friend the Member for Hayes and Harlington (John McDonnell) can catch your eye, Mr. Deputy Speaker, he might set out how we can do what we want to do, and put some recognition of the role of the fire and rescue service into the Bill.
	I heard what the hon. Lady said about the need to consider how that might fit with other pieces of legislation, but references to the fire and rescue service pepper the final Pitt review. In an emergency, when people are facing floods, the service to which they are most likely to turn is the fire and rescue service. It seems bizarre, therefore, that none of the welcome changes that we are making contain a statutory duty for the fire and rescue service to be at a flooding incident. Of course, that does not mean that its members will not be there, because they are such good people that they will almost certainly want to be there. I have been talking to the Fire Brigades Union, which wants clarification not just about fire and rescue services wanting to be there, but about the repercussions, as it were, of how they get there-and when they do, what they have to do and how they have to do it.

Bob Spink: My constituents would expect me to be totally supportive of the hon. Gentleman's amendments and new clause, as indeed I am. Canvey Island, which I represent, suffered the greatest loss of life from any flood, in 1953. My constituents do not just want the fire service's statutory position to be clarified; they want it to be given proper equipment and training to enable it to do the job as effectively as it possibly can.

David Drew: I thank the hon. Gentleman, although he has pulled the rug from under me, because the nub of what I am trying to say is that unless there is a clear statutory duty, there will always be a danger that fire and rescue services will not have the resources, equipment or trained personnel to intervene as we all know they would want to. That is why the Bill is seen as an appropriate vehicle for giving clear guidance to each fire and rescue authority on the need to equip its people to do the job.
	The purpose of amendments 24, 25, 27 and 26 is to list the appropriate places in the Bill where we feel that the fire and rescue service should be added as an organisation with a part to play in dealing with flooding. More than anything, we are talking about how the operation of fire and rescue services is about looking at how to deal with flood risk and the different management strategies needed to do so. To be fair, DEFRA recognises that, and to some extent we are highlighting the fact that this is a cross-departmental issue. As I will explain in a minute, other Departments perhaps ought to be listening to the lead that DEFRA is giving, to ensure that fire and rescue services are properly placed to deal with the problems that we have already identified and that we all know about.
	Let me deal with the current situation. My hon. Friends and I believe that the current law is incoherent. Fire and rescue authorities have to plan to deal with floods. They have the power to respond, but they do not have a duty to do so. The Civil Contingencies Act 2004 gives fire and rescue authorities duties in respect of emergencies, including flooding. Those duties include assessing the risks of emergencies and planning not only to prevent them but to reduce, control and mitigate their effects.
	The Fire and Rescue Services Act 2004 gave fire and rescue services the ability to respond to eventualities other than fires and road traffic accidents, which could imply that flooding was included. However, then there was a problem, because the Department for Communities and Local Government effectively did a U-turn in March 2007, when it published the Fire and Rescue Services (Emergencies) (England) Order 2007, which did not include flooding. At the very least, therefore, there is confusion about the role of fire and rescue services in flooding.

Lembit �pik: The hon. Gentleman knows more than most about how important it is to get such matters right. I am listening to his argument, but on the point that he has just made, is he implying that that confusion creates a risk that although fire and rescue services will always go to the aid of people in need, they might not have the resources to do so? Is his assumption that if his amendments were passed, the resources required to give the appropriate support around the country would follow on from the legislation?

David Drew: It is the duty of the fire and rescue authorities to provide that equipment, those skills and the capacity for the fire and rescue services to react to flooding, just as they are expected to respond to fires and vehicle accidents.
	I shall not labour the point, but in recent history we have some good examples of fire and rescue services being employed to their full capacity in Gloucestershire, Sheffield, and more recently Cumbria. It is clear that although that may not be normal-in these days of climate change, we are not quite sure what normality means-it is an important part of the fire and rescue services' precautionary provision. That is not just local provision. In episodes of flooding such as those in Cumbria and Gloucestershire, fire and rescue services are brought in from many other brigades. Such is the scale of the disaster that that level of response is needed.
	My hon. Friends and I seek to put into the Bill what Pitt refers to throughout the report. The key part of the report is recommendation 39, which states:
	The Government should urgently put in place a fully funded national capability for flood rescue with Fire and Rescue Authorities playing a leading role, underpinned as necessary by a statutory duty.
	One could say that that was slightly equivocal, but I take it to be, as near as dammit, a statement that there should be a statutory duty. Pitt subsequently argued:
	It is equally a matter of the fundamental principles underpinning this Review. . . which is to give clear and unambiguous direction-giving certainty where there is doubt-that the systems currently in place, or those otherwise proposed, will provide the desired outcome. We must be clear about who does what to ensure that people and organisations are held to account, structures are simple and outcomes are more certain.
	In the recent Cumbrian disasters, as we know, the fire and rescue services were to the fore. I do not think it would be speaking out of turn to say that in discussions that I have had with my hon. Friend the Minister, that is held up as a good example of integrated working. I have no reason to deny that, although we have not yet had the wash-up-sorry about the pun-from those disasters to see what was learned and what could be done differently. From talking to some of the firefighters who were involved in the Cumbrian episode, I understand that there were issues concerning equipment and how they were to get access to it. I shall give a couple of examples.
	In the Cumbrian floods in November 2009, according to the current edition of  Firefighter, there were 64 sets of swiftwater rescue personal protective equipment. When the floods first broke, a Whitehaven crew fully trained in swiftwater rescue could not carry out its duties: in the safety-critical period when the floods first hit, there were no dry suits for them to wear. Crews who had not been trained for water rescue had to put on the dry suits that were available and take to the water, leaving the SWR-trained crew high and dry.
	In the great scheme of things, that does not seem to be an issue on which we should legislate, but as I and others have said, this is life and death stuff. In a sense, it is more important than legislation. It is about what people do in a crisis, when they know that they have to get the equipment and the right people in place, and exercise their judgment about how to operate safely for themselves and have the greatest impact on those whom they are there to save and rescue.
	I hope my hon. Friend understands that this is not necessarily the only chance to get the legislation right. There is a germ of truth in what the hon. Member for Vale of York (Miss McIntosh) says when she asks whether this is the appropriate place to try to change to law. I am open to suggestions on that subject, but we should not miss the opportunity to clarify the role of the fire and rescue services. We know that episodes of flooding occur all too frequently. The role of the fire and rescue services is clearly central to what happens in such emergencies. We must ensure that the fire and rescue services are properly equipped and trained and have the capacity to operate in the most effective manner. Making it a duty to ensure that would be the best way of achieving it.
	Those who saw what happened in Gloucestershire have nothing but admiration for people who undertook the most dangerous jobs. My son-in-law is a retained firefighter, so I have to be a bit careful. I am not declaring an interest. Firefighters are the people who save lives and have to make the judgment calls that some of us talk about but are never required to make. I hope that my hon. Friend the Minister will listen to what my hon. Friend the Member for Hayes and Harlington (John McDonnell) might say about ways forward, if he is called to speak. This is a serious subject, and I hope it will be treated seriously by the Government. As we have a listening Minister who has performed admirably in improving the Bill, I hope that our new clause will be another change that we can get into statute, making a good Bill even better.

Laurence Robertson: It is an honour to follow the hon. Member for Stroud (Mr. Drew) who, as I am sure the House would agree, has spoken a good deal of sense about the fire and rescue services, who performed heroically in Gloucestershire in 2007, and continue to do so.
	It is probably unusual for a Front-Bench spokesman on one Department to serve on a Bill in the sphere of another Department, but when I was asked to do that for the Committee stage I did it willingly, because the Bill is so important to my constituency.
	When the Minister spoke for the first time this evening, he talked about the Bill rather more enthusiastically than I might do. I do not think it is quite the wonderful Bill that he described. It is certainly welcome, and a move in the right direction, and it puts the issue on the agenda for discussion. That is to be welcomed, but I regret that we were not able to win more votes on amendments in Committee. I would like us to strengthen the Bill tonight. Although it is welcome and contains nothing to disapprove of, there is not enough in it to make the kind of difference that I would like to see.

Lembit �pik: Although we must not deviate too far from the amendment, does the hon. Gentleman agree that these and other amendments seek to improve things at the margins, but fundamentally in his constituency, in mine and in that of the hon. Member for Stroud (Mr. Drew), there is a profoundly serious issue that probably needs upstream management, and which is beyond the scope of the amendments under discussion, but to which we will undoubtedly have to return if there is a repeat of the 2007 floods?

Laurence Robertson: The hon. Gentleman is correct. I hope that we will return to that issue soon-although it would have to be after the general election. We should treat the Bill-or Act, as it will then be-as a working document and a good start, but as something that we need to improve on. There is nothing wrong with that; we have to start somewhere. I do not mean to be over-critical of it, but I would rather see it improved in certain ways now.
	We have heard a lot about floods occurring once in 100 or 200 years-or, in respect of the north-west floods of a few months ago, once in 1,000 years. I do not think that we can speak in those terms, as I do not believe that floods have been recorded for 1,000 years, in which case we cannot say how often they have occurred over a 1,000-year period. In view of climate change, which we discuss in one form or another every day, we cannot assume that weather patterns will be the same in the future as they have in the past.
	The point is that we must do everything we can to prepare our areas for flooding. My own area of Tewkesbury floods regularly. It has been flooded in the past couple of weeks, and the roads as well as the fields near the famous Mythe waterworks, close to where I live, have flooded. It does not always make the news because it happens so often. It is something that we have to live with regularly. Living at the confluence of two rivers, the Severn and the Avon, we know that we are going to flood every so often. What we request of the Government is that they do not make matters worse-for example, by building too many houses in the wrong place. Also, where it is possible to adopt measures to improve matters, we should do so.
	I shall speak briefly to three amending provisions proposed by my hon. Friend the Member for Vale of York (Miss McIntosh), the first of which is new clause 2, dealing with the Environment Agency and the maintenance of main watercourses. We had major floods two and a half years ago, and afterwards, of course, there was a lot of wisdom: we then saw many drains and culverts in disrepair, ditches and streams that had not been cleared out, how much work could and should have been done on the rivers, and so forth. While we have to repair the damage-that has been done throughout my constituency-we should follow a principle of maintaining the waterways. It is the same principle as having our car serviced at regular intervals rather than waiting for it to break down. Servicing should happen so that there is less chance of breaking down again. Even with the car, we cannot entirely rule out a further breakdown, but servicing should make it less likely and if it does break down, the damage should not be so bad if proper maintenance has taken place. It is crucial to stress to the Environment Agency and other bodies responsible for waterways that we must have regular maintenance.
	As I said, we found many examples in my constituency of where the situation could have been better-or less bad, which is probably a better way of putting it. The village of Prestbury, which contains the great Cheltenham race course and falls within my constituency, saw flooding not only in July 2007, but earlier in June 2007. I visited people who told me that they had lived there for 40 years, yet never experienced flooding before. I thought that that was rather odd as the area contains houses and streets that flood quite a lot, but it seemed not to have happened in this particular place until June 2007. I then realised that a housing estate had been built on what I consider to be an inappropriate place, which no doubt contributed to the flooding further down the road. I also discovered that two culverts had been put in, supposedly to take the water away, but-unbelievably-they had not been joined up. One culvert had become damaged, but had not been fixed. That is a good example of how a lack of maintenance and a lack of proper planning can make matters so much worse. I thus endorse new clause 2 and what my hon. Friend said about it.

Greg Knight: I also support new clause 2, but does my hon. Friend agree that it would be better if it provided for quarterly maintenance and annual reports to Parliament rather than the other way around?

Laurence Robertson: Perhaps I should ask my right hon. Friend to discuss that point with my hon. Friend. I think that he probably makes a good point, and he reinforces the principle that we need regular maintenance and reports to tell us what is going on. We certainly need those reports, as it is so easy for people not to maintain things and for us not to know about it. I return to the car analogy: if we do not have our car serviced at the right time, it may not necessarily break down next week, but it might well do so not long after that. If we do not know that regular maintenance has been done, we will be heading for problems.
	New clause 9 is important and would require the Secretary of State to assess the staff, equipment and resources that the Environment Agency possesses in order to implement the Bill's provisions. One problem I had during the floods of 2007-I am sure that other hon. Members did, too-was trying to establish who was responsible for what and for which watercourses. This may go slightly beyond the scope of the amendments, but once we had discovered who was responsible for what, getting them fixed became the next problem, as we were told that they did not have the money. It would be good if the new clause were adopted because the Secretary of State would know whether the Environment Agency had the resources necessary to deal with the problems-not only the daily ones, but the further issues with which the EA is now required to engage and for which it must prepare a strategy.
	It would be folly and dangerous to go ahead without ensuring that the Environment Agency had the necessary resources. It has to prepare a strategy and then implement it, and if it needs £x to do so, but it gets only £x minus 10 per cent. or 20 per cent., the shortfall might prevent it from delivering the strategy. The same problem could arise with the lead flood authorities-in other words, county councils-which must have the resources to make them confident enough to prepare the strategy that is necessary, not a reduced one.

Lembit �pik: The point about responsibility is important. Does the hon. Gentleman agree that the Environment Agency has at times wanted to intervene to prevent the building of houses, for example, but lacked the authority to impose its will? That is one of the problems that arises without clear delineation. Is he saying that in supporting this part of the new clause, he wants both resources and jurisdiction clearly defined so that we avoid ending up in the mess we had 10 or 15 years ago?

Laurence Robertson: The hon. Gentleman makes a good point. It reminds me of another incident in my constituency, which provides an analogy. A chemical factory exploded; the Environment Agency was monitoring it. We all knew it was dangerous and said so at the time. I visited the site and came away not feeling at all well, and I made that clear to the agency. However, it was rather frightened that it did not have the power, the clout, the ability or the confidence to deal with the problem. That factory exploded in October 2000, leaving many people unwell as a result. We got rid of the factory; it left my constituency. The Environment Agency was very concerned about being taken to court by the company if it carried out certain actions that everyone in the area knew should have been done. The explosion proved us right: we were not scaremongering; it could have killed people. A couple of days after the explosion, it was, amazingly, flooded. It is a big issue. I would like to see the Environment Agency's role more clearly defined, and if it is given more responsibilities and powers, it will need more resources.
	That brings me to amendment 5, which adopts a similar philosophy in seeking to ensure that local authorities are properly financed for training and equipment costs and that their ability to carry out what they need to carry out is laid before Parliament. There is considerable concern among local authorities about being given extra responsibilities, duties and powers without the concomitant funding. As my hon. Friend mentioned, we are not entirely convinced that the appropriate amount of money will be given to local authorities. The Minister did his best in Committee to assure us that there would be enough; I just hope that that is the case. The main planks of the Bill are that the Environment Agency shall prepare a strategy and implement it, and that the lead local funding authority shall prepare a strategy and implement it. If those strategies are to be effective, they are going to require the confidence of having the necessary resources provided.
	With those few remarks, I support my hon. Friend in respect of new clauses 2 and 9 and amendment 5.

John McDonnell: I support the proposals of my hon. Friend the Member for Stroud (Mr. Drew) and others.
	During this and a number of other Sessions I have found it difficult to support some of what the Government have done, but I fully support this Bill, and I commend the Minister on what has been a model process in many respects. The genesis of the Bill lies in the floods of 2007, which affected a number of hon. Members personally. They stood by their constituents and worked hard on their behalf, and I remember the Government's response as well. Ministers made visits within hours of the floods being seen as major disasters, as they did at the time of the Cumbria floods last year. They talked to people on the ground, and soon afterwards instigated the reviews that led to this Bill.
	Sir Michael Pitt did an excellent job in conducting his review. His recommendations to the Government were very explicit. As was mentioned by my hon. Friend the Member for Stroud, who quoted from the report, what Pitt wanted was absolute clarity about the legal responsibilities and duties relating to flooding, which is why he strongly recommended that a legal duty should be placed on the relevant authority.
	Along with my hon. Friend and other hon. Members, I work with members of the Fire Brigades Union. At the time of the floods we heard about not just the heroism of firefighters and others, but the constraints that hampered them and the problems that they encountered. The issue that arose time and again was the need-as echoed in the Pitt report-for absolute clarity about their responsibilities and the duties placed on fire authorities. So far so good, but when the legislation was produced, my colleagues and I were disappointed to note that it made no reference to those duties. The legislation is appropriate, but I fear that if we do not include that duty now, we shall not have an opportunity to include it for some time. How often does a Bill of this kind appear?
	Notwithstanding all our commendations of those who were involved in the Cumbria experience, from firefighters to local authorities and others, I have to say-again echoing my hon. Friend, along with reports that we received from firefighters-that there was concern at the time about lack of equipment and training. There was also concern about co-ordination, although I agree with the Minister that that seems to have improved dramatically. Firefighters turned up and found that the necessary equipment was not there or that the equipment was not appropriate, or in the wrong place. That is why I believe that the Pitt recommendations should be installed in the Bill, and that a duty should be placed on fire and rescue authorities to provide for major flooding incidents.

Greg Knight: Was the hon. Gentleman in the House on 15 December last year for the Second Reading debate? When I intervened on the Secretary of State to ask him when he would implement the Pitt recommendations by giving the fire service a statutory duty, he said that he did not think it necessary because, in his view, it provided a good service. Does the hon. Gentleman not consider that complacent in the extreme?

John McDonnell: I was present, and I apologise to the right hon. Gentleman. I did not nod off, but I must have been distracted, because five minutes later I repeated the same question in almost exactly the same form-although possibly in a less critical form than the right hon. Gentleman-and received the same response.
	Among the firefighters on the ground, the demand for a statutory duty remains. I know that Sir Ken Knight suggested otherwise. I have the greatest respect for Sir Ken Knight, but, having not attended his beatification, I do not believe that he is infallible, and I think that in this instance he got it wrong. I met the FBU executive only a few weeks ago, and I met the general secretary during the past week, and the message has come back time and again that a statutory duty is needed.
	Let me explain the difference between a power and a statutory duty. I have been a local government officer and a local councillor. I have been involved in the construction of budgets, including fire authority budgets. I have been involved in circumstances in which we had to reduce the number of staff and cut overall expenditure. Any local government officer will tell council members that a statutory duty is stronger than a discretionary power. When councils are faced with the sliding scale of cuts or investment, the recommendation will always tend towards protecting the statutory duty.
	We all know about the constraints that will be placed on public finances in the coming period. I fear-this point was made on Second Reading as well-that unless a statutory duty is placed on fire and rescue authorities for major flooding, there will be not only the lack of clarity that worried Pitt, but a lack of protection for the long-term investment required for training, staffing and equipment.
	The process of considering what should go into the Bill and examining what has come out of reports has been handled well, and it is clear that a co-operative and constructive relationship existed in Committee. The Minister has made himself available in response to all requests from hon. Members for meetings with him. Furthermore, for the first time in a long period, we have been given enough time to debate a Bill on Report. That came as something of a shock to a number of us, given the House's current procedures. However, I expect the Minister to say that we are still awaiting the feedback from the analysis of what happened in Cumbria, that co-ordination has plainly improved, and that therefore he is not yet convinced of the need for a statutory duty.
	Let me say this to the Minister. If he is not convinced tonight, there is a possible way forward. We could do what we have done in other legislation. Rather than missing the opportunity to include some form of statutory duty in the Bill and having to wait for one, two or three years for another piece of primary legislation, we could table an amendment in the House of Lords giving the Secretary of State power by order to include the duty at some later stage, once he or she has become convinced of the necessity for it. That would not require further primary legislation. Delegated legislation, involving either the affirmative or the negative procedure, could enable the Government to act in the light of the latest analysis of what has happened in Cumbria and beyond.
	We may well receive details of the lessons of Cumbria before the matter reaches the House of Lords, in which case a straightforward amendment or new clause along the lines of the new clause proposed by my hon. Friend the Member for Stroud could be tabled there. If that is not possible, at least let us have a fallback position giving the Secretary of State a reserve power to provide for a statutory duty in delegated legislation. I believe that that would allow us to have a robust piece of legislation, responding to the demands presented by the major flood disasters that occur from time to time and reflecting the Pitt recommendations, while giving the Government flexibility to act as and when they saw fit. I fear that if we do not take that opportunity we will live to regret it, and that others may suffer as a result.

Martin Horwood: I shall continue the spirit of cross-party friendship by expressing support for new clauses 2 and 9. New clause 2 addresses an issue on which many of our constituents have sought a lot of reassurance. As the hon. Member for Tewkesbury (Mr. Robertson) rightly pointed out, in the aftermath of the floods, the maintenance of water courses-what had been and what had not been maintained-was a major issue. I took a very brave member of staff at the Environment Agency around various parts of Cheltenham, including Sandford Park and the George Readings estate, to explain the process of maintaining the water courses around the River Chelt, which is defined as a main river despite the fact that it is only a couple of inches deep most of the time. We discussed what exactly the EA's responsibility was in that respect and what it was going to do in future. I pay tribute to Anthony Perry from the EA for making those visits and for being open and communicative with my constituents.
	The process of reporting that the new clause suggests would offer the people at the Environment Agency, among other people, an opportunity to explain where and when maintenance was supposed to be taking place, in its opinion. If, in its opinion, maintenance was not appropriate or necessary, it would have the opportunity to set that out, too. That would all add to the spirit of transparency and openness about maintenance, which was a matter of great concern to many constituents.
	New clause 9 is also important and reflects much disquiet about the resources that will be available to the Environment Agency to carry out its duties under the Bill. Throughout the Bill, there are measures that will lead to not only more strategic work, but more specific investigations, duties, responsibilities and liaison. It is important that we are reassured that that can be done in practice. As far as we can detect, no new resources appear to be available.
	There is one source of funding for such work. It is not a happy precedent. The Minister kindly replied to two of my parliamentary questions on 26 January 2009 about the exact breakdown of the flood and coastal erosion risk management budget. I was not looking for this bit of information, but it reveals something quite startling, which is that the amount of the flood risk management budget retained by the Department for Environment, Food and Rural Affairs, as opposed to that passed on to the Environment Agency through grant in aid or to local authorities through the formula grant, went up from zero in 2007-08 to £3.75 million in 2008-09 to £20.5 million in 2009-10 and it was expected to be £35 million in 2010-11.
	That may reflect the implementation of various aspects of the Pitt report, some of which may be welcome. The Minister might confirm this, but if that includes things such as the establishment of the national flood forecast centre, that is a welcome development, which everyone called for, including Sir Michael Pitt, and we supported it. Clearly that will cost some money and may reduce, if it is successful, the need for some hard defence spending using other bits of the flood management budget. However, if that is to be the precedent for how we pay for things that we cannot immediately find money for in the area of flood risk management, if we simply raid the overall budget for flood risk management and thereby give less to local authorities and the Environment Agency for flood defence works, although it delivers an almost bottomless pit of possible funds to the EA and to Ministers, it has bad consequences, which Sir Michael Pitt and those at risk of flooding in our constituencies would not welcome. It will inevitably mean that the backlog of projects and of necessary work to be carried out by local authorities and the EA will be delayed. Therefore, I seek some reassurances on how ring-fenced the future budget for flood risk management will be, as it was intended for work by the EA and local authorities.

John Redwood: Is not one of the problems with this whole area that we can all get access to lots more experts, memos, legal advice and buck passing, but we cannot get access to any money for men in diggers to get the ditches cleared?

Martin Horwood: The right hon. Gentleman makes an eloquent point. The spirit of it is exactly right. It underlines the risk of endlessly creating more and more bureaucracy and responsibility. Some of it may be welcome, but if it is allowed to grow without restraint, we may find that the practical result is less flood defence, not more.
	New clause 20 and amendments 24, 25, 27 and 26, which were eloquently spoken to by my honourable neighbour, the hon. Member for Stroud (Mr. Drew), reflect the reality of the situation-fire and rescue authorities play a critical role in the management of such emergencies and in flood risk management. In Gloucestershire in 2007, the close liaison between fire and rescue authorities and the other gold command agencies was critical in ensuring a more positive outcome for the people of Gloucestershire than we would otherwise have had. I am happy to join in the tributes to Gloucestershire and to other fire and rescue authorities for the work that they have done in response to the flooding.

Laurence Robertson: Does the hon. Gentleman agree that it was greatly beneficial at the time that the three emergency services were based at the tri-centre under the same roof? Would he oppose any threats to that situation?

Martin Horwood: I am absolutely in agreement with the hon. Gentleman on that. In fact he could have taken the words out of my mouth. The Government's proposal to break up that shared service is very much to be regretted. I hope that it will not happen. The omission from the Bill of statutory duties relating to fire and rescue authorities must be, I hope, an innocent omission, but it is serious nevertheless. I hope that the Government will take the opportunity to correct that. The hon. Member for Hayes and Harlington (John McDonnell) rightly pointed out the difference between leaving it as an informal power that can be exercised, and spelling out a statutory duty in the Bill. I am entirely in agreement with that.
	Amendment 5 is in some ways parallel to new clause 9 in that it addresses the possible shortfall in funding at local level, as opposed to national level, and the resources available to local authorities in their new lead role as flood risk management authorities at local level. That is still causing concern to the Local Government Association and to officers and leaders of local authorities of all political colours, despite the reassurances from the Minister. He has confidently said on several occasions that all new responsibilities will be fully funded, but like the hon. Member for Vale of York (Miss McIntosh), I remain pretty sceptical about how that can be done.
	Gloucestershire county council, despite being run by the Conservatives, did a perfectly respectable job, which I applaud, during the floods of 2007, but since then there have been more and more demands on its resources. It has had to cope with further unexpected demands from snow, and further, less dramatic, flooding, which nevertheless required further work by officers and imposed further demand on resources. We have had yet more snow in the past couple of weeks, and the big freeze created an epidemic of potholes over the entire county, with roads breaking up all over the place. Those demands are not to be met through any earmarked pothole budget or snow budget. The funds are coming out of the general resources of the county council. It is not clear how those additional lead responsibilities, which will not be given any earmarked funding, will be exercised without putting more and more pressure on county councils and other lead local authorities.
	These are tough times for local authorities and all the signs are, from all political parties, that in the aftermath of the election, the need to reduce the Government's deficit will make those times tougher still. It seems pretty harmless to propose an independent review as set out in amendment 5 to consider the implications of those new responsibilities and demands in the context of the whole local authority budget, so I hope that the Government will see fit to accept that.
	Amendment 4 is a bit odd since it appears to require Parliament to approve a report by a quango. If we had to approve all the reports by quangos to this place, we would probably do little else. I am not clear what would happen if we did not accept such reports. I am not sure what the consequences of that would be, so perhaps the hon. Lady will be able to clarify that.
	Amendments 31, 32, 33 and 34 are sensible responses to points made in Committee, and I commend the Minister on having responded to them in such a positive way. Amendment 28 addresses the important issue of the possible harmful consequences of the quite extensive powers given to the Environment Agency under the Bill. It is, perhaps, more directive than the current wording, since it specifies that no harm shall be done to, for instance, the preservation of cultural heritage, rather than obliging the EA to balance harm and benefit. It may, therefore, be a little idealistic, and I would not necessarily want to be the EA official who has to square that circle, but I would be interested to hear how practical the Government think this proposal is.
	Amendments 48 and 49 are, again, very welcome implementations of the intentions behind two amendments in Committee-Liberal Democrat amendments in this case. The powers of the EA need to be sensitively implemented, particularly in respect of private landowners and land occupiers, and as these amendments reinforce the need for sensitivity and consultation, I support them.

Angela Watkinson: I rise to speak briefly to new clause 20, for which I have a great deal of sympathy, not least because I have a daughter and two sons-in-law in the London fire and rescue service. I am therefore acutely aware of the nature of the job, and the dangers and difficulties it presents. I want to make two main points: the first concerns the absence of a statutory duty to attend flooding incidents, and the second relates to the issue of overall control in an emergency situation.
	I have been very surprised to learn, both in Committee and from speaking to serving firefighters and chief fire officers, that there is no statutory duty on the service to attend a flood-although I am not aware of it not having attended any such incident. The new clause provides a long list of duties that would pertain to the fire service, but it is not possible for its officers to take on those duties without the proper training, equipment and clothing. That has big funding implications, of course, but there has been no indication of where the funding might come from.
	The recent Cumbria incident was a very serious emergency flooding situation, and I have seen pictures of firefighters waist-deep in floodwater that is very likely to have been contaminated by sewage, yet they were wearing their normal-issue clothing, which is intended to protect them from fires. It is wholly unsuitable for flooding situations. The moment they get into the water, they are wet right through, and when they remain in the water for a long period they are at risk of hypothermia and of infection and germs from contaminated water. Clearly, this situation cannot continue, and although the list of duties in the new clause raises several significant funding implications, it is a basic essential that if firefighters are going to enter contaminated water to try to carry out duties such as rescuing people from their homes, they must have the right clothing to wear to protect themselves and to enable them to carry out their duties.
	The question of who has overall control in an emergency flooding situation was raised in Committee. A wide range of statutory bodies and charitable and volunteer organisations will appear on the scene, all of them trying to help and do what they can to address the situation, and rescuing people will be their first priority. These bodies will include the fire and rescue service and the police, of course, as well as statutory undertakers, local government and, perhaps, social services teams, and St. John Ambulance staff. The last thing that is wanted in such a situation is confusion about who is in overall control.
	I was assured in Committee that the gold command procedure is working very well, but I know that the fire and rescue service would like more clarity, and also that it would like to have overall control in an emergency situation. Everybody who is present needs to know to whom they have to report, so that there is some strategic overall control. These situations are often very dangerous not only for the people being rescued, but for the rescuers themselves, both statutory and voluntary. There is a particular point to make about volunteers: there is no jurisdictional authority over them. They might be individuals or members of local community groups that could have come from anywhere, and they can put themselves in danger when they try to help others in a flood situation.
	There needs to be clarification on these matters. In serious flooding incidents such as the most recent one in Cumbria, there needs to be absolute clarity about who has overall strategic control on the ground. It is my understanding, however, that the gold command system is not necessarily conducted on the spot; instead, it is conducted from a control room away from the actual emergency.
	Every time there is an emergency, we need to study the debriefings of the people who were there in order to learn what worked, what did not work and what is missing in procedures, so that we are prepared for any future incident. It is also essential that firefighters have the proper clothing for dealing with flood situations. Their standard equipment is suitable only for firefighting.

Roger Williams: The hon. Lady raises a very important point about the fire and rescue service. The mid and west Wales fire and rescue service has inflatable dinghies for dealing with flood situations. They are manned mostly by retained firemen, so when they are called out, that costs extra funds. The service has no statutory duty to respond, however, and neither does it have any financial resources to do so. This therefore puts a great burden and much stress on it.

Angela Watkinson: I thank the hon. Gentleman for that intervention. It serves to clarify that in emergency situations there needs to be someone in complete control over all the statutory bodies that are in attendance, and everything possible must be done to protect fire and rescue officers and all the other statutory personnel, as well as all the volunteers, some of whom may not be used to being organised or operating within a chain of command. They, in particular, need to know to whom they should report and from whom they should take instructions, both for their own safety and that of the people they are helping to rescue. What comes through from our experience of the most recent incident is that we must learn about, and take action on, all the areas where there can be improvements in the co-ordination of the service, and make sure that everybody who has a statutory duty has the proper equipment to be able to do their job.

John Redwood: I welcome in particular new clause 2, tabled by my Front-Bench colleagues. First, I welcome the fact that it states:
	The Environment Agency must undertake a programme.
	We need greater clarity throughout the legislation on who is responsible for what, and the new clause gives a lead on that. Secondly, I welcome the requirement that the Environment Agency undertake regular maintenance of the major watercourses. Under existing legislation the Environment Agency is responsible for the major watercourses, but as I discovered when trying to follow up on the persistent-the all too regular-flooding incidents in my constituency in recent years, it is terribly difficult to get any single body to take responsibility. There is always buck passing between the EA, the water companies and the local authority; each of them makes out a case that it is not technically responsible.
	Clarity is essential and, unfortunately, I do not believe that the Minister's legislation, in its widest sense, provides that. The Bill seeks to provide it in some areas, but in other areas it will be a lawyers' charter. I have a heavy feeling in my heart that there will still be endless battles to establish who is responsible for what. I hope that we have not lost the clarity provided in existing legislation on the fact that main rivers and watercourses are the responsibility of the Environment Agency. That should remain the case; the Environment Agency should maintain them to ensure that the flows are as good as possible, given the existing channels and water flows in those rivers, and should come up with major and minor capital schemes to improve them where we persistently and regularly encounter obvious flooding problems.
	My constituency is typical of those which were badly attacked by floods in 2007-but this flooding did not just happen in 2007. We have often been told that these events happen once in 100 years, but for many of my constituents such flooding might be a two or three times in a decade event; it is becoming extremely persistent. The main reason is overbuilding on the floodplain, which is often forced on the council against its will and when its judgment was rather better. In such situations, I have always encountered a secondary problem of inadequate facilities and the inadequate maintenance of facilities. That means that water flows are impeded or are simply too great for the facilities provided by the Environment Agency, the water company and, in some cases, the local authority, and thus there is bound to be another flood. I hope that the Minister will give us some comfort in addressing the initiative proposed by my hon. Friend the Member for Vale of York (Miss McIntosh).
	Let us consider the problems in my area. The River Emm is a rather small stream at most times, but can swell quickly; the River Loddon is a fairly big river, because it is close to joining the Thames by the time that it flows through my area; and on the edges there is the Thames itself and some Thames floodplain. All of those flood, and it is clear that some of the problem is the aggravation that comes from improper maintenance. All too often branches get caught in the River Emm, resulting in the detritus of leaves, litter and so on which creates a mini-dam at various places along the watercourse. Vegetation grows extremely quickly in the rather wet summers that we are having these days and that creates another barrier to the free flow of water. Clumsy people sometimes do not help the matter by putting a shopping trolley or an old pram into the river, thus adding to the trees and the vegetation, and before we know it, there is a dam in the river. Maintenance work cannot be done once a year; people have to be sent out regularly to inspect and to supervise. If a little work were done often, it would not be so expensive. We need boots on the ground; we need someone who walks the course. We need someone who has the tools and equipment necessary to remove that detritus.
	One of the obstacles on the Loddon, which is a bigger river, results from the fact that people dropped a lot of masonry some years ago when they were building a bridge-undoubtedly this was a public sector project that caused problems. These people never bothered to take the masonry out of the river bed and so at a very crucial point where the river abuts a pub and houses there is insufficient depth. That is where it naturally floods. It also usually floods the main Reading road.
	In the most recent bad floods, all the main roads to Reading were cut off, with the exception of the motorway. It is odd when someone in high-tech valley 35 miles from London cannot for a whole day make a simple journey into the main town in the middle of our high-tech valley because the rivers have not been kept clear or the necessary capital works have not been carried out to handle the water. I hope that the Minister will take this more seriously.
	I am glad that the Liberal Democrats support the proposal. Their spokesman, the hon. Member for Cheltenham (Martin Horwood), has brightened up our debates, because it is the first time that I have seen someone come along with carefully prepared and beautifully typed-out scripts on each of the provisions, with his notes on the Liberal Democrat amendments on yellow paper, his notes on the Conservative amendments on blue paper, and his notes on the Government amendments on light pink paper-that paper should probably be dark red now, as they have moved on.

Huw Irranca-Davies: Deepest red.

John Redwood: Exactly. I am sure that the Minister is upset that the notes on the Government amendments are only on mild pink paper.

Martin Horwood: I can reassure the right hon. Gentleman that if he had tabled any amendments, the notes on those would have been on extremely dark blue paper.

John Redwood: I think that was a compliment, but I cannot be sure. The hon. Gentleman's well prepared support is welcome, and I am sure that he speaks for his community, as I speak for mine. I think that all sensible right hon. and hon. Members of this House would wish to support this proposal, because it is clear and positive, and it addresses one of the reasons why we have all too frequent flooding in our constituencies despite the fact that a stitch in time-simple action-would save nine.
	The proposal would even be a public expenditure cut, and we need that at the moment. Little-and-often maintenance would mean that we would not have huge clear-up and clean-up costs and we would have none of the bureaucracy that one encounters after a big flood, when one sees inquiries, lawyers, highly paid executives, more quangos and more legislation. I assure the Minister that we are not short of any of those things.
	When dealing with the flooding issue I have found all too many expensive and intelligent people to whom to talk, write or complain, or to receive memos or arguments from. I have met all too many people who work out strategies and plans, and who tell me why one cannot do it today but that one might, after spending a long time in a queue, be able to do it tomorrow. As I keep saying to these people, all we want is someone who does something: a man or woman in a digger who clears a ditch; someone who puts a new pipe in; someone who goes out to cut the vegetation down; or someone in a pair of gumboots with good sturdy tools that can clear a ditch that is too small for a digger to go down. That is what we need. I suspect that it would cost a lot less than the massive bureaucracy that this legislation and its predecessors has created. I want an Environment Agency that actually gets out there and does some physical work; I do not want an Environment Agency that gives 1,000 clever excuses while my constituents have to continue to be flooded.

Bob Spink: I have an Environment Agency that is pragmatic and is out there working right this moment, looking at Canvey Island's defences. It is led by Daffyd Davies, the area manager. He is a fantastic man and I congratulate the Environment Agency warmly, as it is helping to defend my constituents. I shall discuss that in a moment, but first I must congratulate the Government on this Bill. In particular, I must congratulate the Minister, who has driven the Bill through in his characteristically courteous style.
	I shall ask the Minister to go a little further tonight on new clause 20, which was tabled by the hon. Member for Stroud (Mr. Drew) and which I support strongly. I particularly ask the Minister to provide help, because of what the hon. Member for Hayes and Harlington (John McDonnell) said about this perhaps being our last chance for a number of years to put the role of the fire service on a statutory basis. Such an approach is necessary, and it is what new clause 20 and the other new clauses seek to do. It would enable the fire service to get proper training, equipment and clothing-we have heard about those things tonight-so that it can carry out its flood rescue responsibility, which it does assiduously and extremely well and for which we are all very grateful. The proposal would also give greater protection to certain fire stations, such as the one on Canvey Island, which I have fought to save on two occasions since I first came to this House in 1992-thankfully, I fought successfully. I hope that I do not have to fight again, but if I did, a statutory duty in respect of flood rescue would make my task that much easier.
	I am sorry if I misrepresent the Conservative Front-Bench team when I say that my feeling was-they will correct me if I am wrong-that they did not seem fully supportive of new clause 20 and its proposal to put the fire service's flood rescue responsibilities on a statutory basis. I am sorry if that is their position, and I know that my constituents will be sorry too. I hope that the Minister will indicate a willingness to help the House. If he does not do so, I hope that we can put the matter to a vote and see where everybody stands on it. I shall certainly be voting for new clause 20.
	Let me set the issue in context. Canvey Island was a victim of the big flood of 1953, when 58 men, women and children were drowned. They died in that flood; this is not an academic matter for my constituents. Almost 10 times as many people are now living on the island, and they still have totally inadequate access arrangements. An evacuation in an emergency situation would be problematic. We see the probability of emergency situations arising and of extreme weather events and flooding increasing. The 1,000-year flood defence that was put in for Canvey several decades ago might now need to be carefully managed. That is why I am so grateful to the Environment Agency for keeping a sound weather eye on this matter.
	That brings me to the next issue, which is my final point, as you will be pleased to hear, Madam Deputy Speaker. It is addressed by new clause 9, which was tabled by the Conservative Front Benchers. I support the new clause and think that it is extremely sensible. I congratulate them on it. It goes to the heart of the effectiveness of the Environment Agency. It provides it with staffing, resources, equipment and clout-as it was put a moment ago. It would make the Environment Agency more effective in controlling and minimising flood risk if Environment Agency advice to local planning authorities was put on a statutory basis and made binding on those local authorities. At the moment, the Environment Agency is a statutory consultee when there is a proposal to develop on the floodplain, but Environment Agency advice objecting to that development does not have to be followed by the planning authority. It sometimes is not-too often it is not.
	We end up with development on the floodplain that is dangerous not only for the people who will eventually occupy that development, but for everyone else. It removes flood storage, increases concrete instead of drainage and displaces flood water so that the flood levels in other areas of that community are higher than they would be if the floodplain had not been developed. That is why I introduced a private Member's Bill to make the Environment Agency's objection to building on the floodplain binding in law. If that were done, it would help me to stop my local council's plans to put hundreds more houses on Canvey Island's floodplain, even without proper access for people to be evacuated, putting everyone else on Canvey Island at greater risk of increased flood levels-

Madam Deputy Speaker: Order. The hon. Gentleman is now straying rather wide of the group of amendments that we are discussing, albeit it is a large group of amendments.

Bob Spink: I am delighted that you allowed me to go as far as you did, Madam Deputy Speaker. I commend you for that and I shall allow my remarks to rest.

Huw Irranca-Davies: Again, we have had a good and full debate. May I begin by thanking the hon. Member for Castle Point (Bob Spink) for his kind words about the work of the Environment Agency? We can always criticise the agency, but let me remind hon. Members that in Cumbria, where only 80 per cent. of the Carlisle defence work was due to be completed in February, the Environment Agency, with its contractors, worked through the night to ensure that the final 20 per cent. was shored up with temporary defences. That saved homes and people in Carlisle, which was not flooded. Where criticism is due, it is due, but although it is very easy to criticise the work of the EA, I see it improving constantly. Its integration with communities on the ground and with local authorities is getting better every day, and I welcome the hon. Gentleman's words.
	Let me begin with my customary assault on the glass-half-empty brigade. I did not expect the hon. Member for Tewkesbury (Mr. Robertson) to sign up to that point of view. He said that there was not enough in the Bill to address flooding. Let me reassure him and the right hon. Member for Wokingham (Mr. Redwood), whose contribution to the debate I welcome. The Bill implements the key recommendations from Pitt, including those on clarity of leadership locally and strategically on a national basis. It will make substantial improvements to flood risk management. That is what the Bill is about. However, it is not the be all and end all. We have made good progress in many areas already that do not require legislation. I refer hon. Members to the way in which this Bill fits in with our wider work, as shown on the Pitt progress report back on 15 or 16 December, which showed exactly how much work has been done. Rather than the glass being half empty, it is more than half full.
	Let me reassure the right hon. Member for Wokingham. This is not just about clear leadership-that is the fundamental point of the Bill-but about clear co-ordination and leadership on the ground, too, as regards flood risk management. Let me pick up on the point made by a couple of Members, including the hon. Member for Brecon and Radnorshire (Mr. Williams), on the maintenance of water courses. The Bill does not distinguish between maintenance and capital works. It provides for a wide range of approaches that will be used only when they are more effective than conventional methods. The national and local strategies will set out how risk is to be managed and provide for a better planned approach. That is likely better to identify clearly on the ground those issues that need prioritisation, including maintenance.
	Let me pick up on the point on the publication of what the Environment Agency is doing and the communication of it. The Environment Agency and wider Government are working always to make information more accessible. I see it myself. The local flood risk management strategy in the Bill should provide a very useful starting point, particularly since clause 9(7) requires it to include guidance about the availability of relevant information. The deliverables-maps, plans and assessments of work being carried out-from the floods directive will also help, since they present co-ordinated information. Maintenance schedules, in line with Pitt recommendation 25, are published on the regional pages of the EA website.
	The hon. Member for Vale of York (Miss McIntosh) asked why some of the technical amendments-she is right, they are technical-are coming so late. To pick up on the comment made by the hon. Member for Cheltenham (Martin Horwood), Government amendments 31 to 34, 48 and 49 are being tabled not late but in good use of my role as a Minister. They respond to amendments that were proposed in Committee. I make no apologies for bringing them forward late-they actually respond to what we heard. Amendments 31 to 24 are tabled in response to amendments from my hon. Friend the Member for Newport, East (Jessica Morden) and others, whereas amendments 48 and 49 are tabled in response to proposals from the hon. Member for Brecon and Radnorshire and others. I am glad to be able to introduce them.

John Redwood: I wish I shared the Minister's enthusiasm for the clarity of the Bill as drafted. It leaves plenty of scope for legal and budgetary rows between the Environment Agency and the principal council in each area under the consultative and committee structure that he has set down.

Huw Irranca-Davies: I disagree fundamentally. Without veering too far off the subject of the amendments before us, I want to say that the Bill has two aspects. One is the clarity of lead responsibility, both locally and nationally, and the other is a duty to co-ordinate and share information as well as to co-ordinate responsibilities on the ground. Those for whom the glass is half empty will say that that allows opportunity for fuzziness and legal challenge, whereas I would say that there is a duty in the Bill that will compel people to co-ordinate their activities on the ground. Curiously, that is what has been asked for, including by the right hon. Gentleman's colleagues: for example, we have been asked to allow lower-tier authorities, internal drainage boards and local flood risk management groups to key into what the Bill does. What he would interpret as legal obfuscation, I would interpret as the necessary flexibility with clear accountability. However, I am going away from the amendments, so let me move on.
	New clause 2 was tabled by the hon. Members for Vale of York and for Upminster (Angela Watkinson)-in fact, five amendments in the group were tabled by the hon. Ladies. Most of these issues were thoroughly debated in Committee, as the hon. Member for Vale of York pointed out. I shall try to convince her and others again, but I have a feeling I shall not. Let us see how we go. I have good intentions, and I hope for good outcomes.
	New clause 2 would require the Environment Agency to undertake a programme of annual maintenance work on major watercourses, with quarterly reports to both Houses of Parliament. As a devolved matter, reports would also need to go to the National Assembly for Wales. As I explained during Committee, the Government are committed to taking a risk-based approach to maintenance, and that approach has been endorsed in recommendation 25 of Sir Michael Pitt's review. The EA's progress on the maintenance programme is reported to regional flood defence committees in quarterly meetings that are public, not held behind closed doors. Minutes are available, and that transparency allows anyone, including Parliament and its Members, to take an interest in maintenance schedules where there are concerns or simply a desire to do so. The Bill also improves the arrangements for additional local authority influence and for the scrutiny of flood and coastal erosion risk management activities in each area. That approach is, again, consistent with the relevant recommendations of the Pitt review, and it is right that authorities should be held to account by local democratic bodies. I therefore do not believe there is a need for additional legislation on this matter.
	The hon. Member for the Vale of York has also tabled new clause 9, which would require the Secretary of State to
	make an assessment of the staff, equipment and resources required by the Environment Agency to implement the provisions of the Act.
	Let me remind her that Government funding for flood and coastal erosion risk management has increased significantly in recent years and will reach £780 million in 2010-11. That compares with Government funding of £600 million in 2007-08, and-let us go back a little-funding of £310 million in 1997-98. All the costs and benefits of this legislation have been set out in the impact assessments that were published alongside the Bill, and more detailed assessments will accompany the regulations and orders that will come from it. Further assessments will be made at the next formal spending review and as part of the Environment Agency's business planning processes, in which wider pressures and capacity issues are assessed by the agency and the Government.
	The hon. Lady asked about capital expenditure and about the increase in the figures that I have used but not in EA spending on maintenance. As I have said, the focus on funding has been on capital improvements, but the funding of maintenance has not been neglected. Some capital projects will include work to improve and extend the effectiveness of existing assets, and we are working with authorities to ensure that they take a proper, whole-life approach to asset management. The hon. Lady, the right hon. Member for Wokingham and the hon. Member for Tewkesbury all made the point that regular maintenance must be seen to be done. Let me refer again to the local flood risk management strategies that provide for the first time a proper, joined-up, co-ordinated, area-wide, and-that horrible word-holistic approach to the management of risk in an area. Those strategies can include the responsibilities of the Environment Agency as well as those of the local authority. They will ensure that the priorities that the hon. Gentlemen and the hon. Lady have articulated can be identified, and that available resources can be used to best effect. Local and national strategies will also clarify roles and responsibilities.
	The hon. Members for Vale of York and for Upminster tabled amendment 5, which refers to instigating, publishing and having regard to an independent review of the recruitment, training and equipment costs that will be incurred by local authorities. We discussed that issue in depth in Committee, but it is worth restating that the Government have carefully assessed the new burdens that we are placing on local authorities and that we are committed to providing the necessary funding in full. From commencement, we will provide an extra £36 million a year to lead flood authorities, in area-based grants, to fund their new role in England. That will allow local authority-led flood management activity to triple from around £18 million to £54 million a year. There were long discussions in Committee about similar amendments, and hon. Members will recall that I undertook to put on to a formal footing the discussions that we are already having with the Local Government Association about cost and resource implications. Since then, officials have had detailed discussions with the LGA about the terms of reference for a joint implementation review panel. Rather than consider this issue in one, two or three years' time, we are putting it on a solid basis. I have written formally to Councillor Gary Porter of the LGA to seek his agreement to co-sponsor the panel, and I hope that the first formal meeting will happen shortly. We hope to gain from those discussions a clearer understanding of the LGA's position, because we do not think that we have done anything unusual in our assessment. The purpose of the panel will be to investigate concerns and to flesh these matters out.
	The hon. Member for Vale of York has tabled amendment 28 on another matter that was thoroughly debated in Committee. It would require the EA, when doing environmental works, to have regard to the national flood and coastal erosion risk management strategy and to create no increase in harmful effects. Like the hon. Member for Cheltenham, I would not like to be the person who had to balance the relevant considerations on that issue. The amendment appears sensible on the face of it, but the Government think that it might render the provision useless. I support the need to have regard to the national strategy, but the Bill already goes further, in clause 38(5), by making the same requirement in respect of local strategies and local and national guidance. That part of the amendment is unnecessary. The wording in the draft Bill was altered in the final Bill in response to representations that simply prohibiting work that increases any of the harmful consequences that I have mentioned would render the powers unworkable. That is because any flooding or erosion caused for the purposes set out in clause 38 would almost inevitably impact on some aspect of the things listed in clause 2. That is why clause 38(3) requires that the benefits of the work must outweigh the potential harmful effects mentioned.
	The hon. Members for Vale of York and for Upminster have also tabled amendment 4, which would require reports that are made by the EA under clause 18 to be laid before both Houses of Parliament and to be approved by a resolution of each House. I share the hon. Ladies' ambition and interest in ensuring that there is proper scrutiny of flood and coastal erosion risk management, but I do not consider the amendment to be necessary or appropriate. The Government intend to ensure that the EA reports regularly on the management of flood risk from all sources. The publishing of those reports will mean that the public and wider stakeholders with an interest in flooding, as well as MPs, are informed about flood management. The Select Committee on Environment, Food and Rural Affairs will also be able to scrutinise reports and to invite evidence as appropriate.
	My hon. Friends the Members for Stroud (Mr. Drew), for Vauxhall (Kate Hoey), for Hayes and Harlington (John McDonnell), for Hendon (Mr. Dismore) and for Luton, North (Kelvin Hopkins) have tabled new clause 20, which would require fire and rescue authorities to put in place provision for rescuing people in the event of major flooding, including from large, raised reservoirs. On this point, the hon. Member for Vale of York talked about not simply assuming that those services will turn up. Fire and rescue authorities undoubtedly have a critical role to play in flood response, including flood rescue, working alongside other response agencies such as the Royal National Lifeboat Institution and, as happened in Cumbria, the Ministry of Defence. That was shown to good effect in Cumbria, but I am interested in the comments of my hon. Friend the Member for Hayes and Harlington about the feedback that he has received. Perhaps we should explore that issue further. In Cumbria, the response was effectively supported by the deployment of the national new dimension programme, which brings together assets on a regional and national basis from other fire and rescue services. It was also supported with flood rescue boats from the RNLI and help from the Maritime and Coastguard Agency and mountain rescue services. That co-operation provided effective co-ordination of equipment across the region in what was an emergency situation. However, I am interested in discussing with my hon. Friend and others anything that they have picked up on the ground.

Anne McIntosh: I hope that the Minister will address two issues. First, the amendments rightly identify that there is no legal basis for expecting fire crews to turn out. That is addressed by the Civil Contingencies Act 2004 to some extent. The second problem, which follows on from that, is that the necessary funds do not follow that statutory duty. That poses real problems for local authorities.

Huw Irranca-Davies: The hon. Lady makes a good point but she anticipates what I am about to say. If she will bear with me, I promise that I will get to the matter that she raises.
	It has rightly been pointed out that the issue of a statutory duty was raised by Sir Michael Pitt in his report on the 2007 floods. The Government support Sir Michael's recommendation that a fully funded national capability for flood rescue should be put in place, with fire and rescue authorities playing a leading role, underpinned if necessary by a statutory duty.
	My hon. Friends the Members for Hayes and Harlington and for Stroud pointed to the use of the phrase if necessary. The House may not be aware that DEFRA has been taking forward work in advance of this Bill to bring together the key stakeholders-that is, Departments and responder organisations-in a project that responds specifically to Pitt's recommendation.
	The project is designed to improve flood rescue capability and co-ordination. So far, it has focused on putting in place a co-ordinated, multi-agency flood rescue capability, as we want to bring all the relevant agencies together. The flood rescue concept of operations, as it is called, is currently in draft and will help clarify the roles and responsibilities of flood rescue responders. Therefore, part of my argument to my hon. Friend the Member for Hayes and Harlington is that we have not waited. We have already started the project, and many of the agencies are submitting ideas to get the flood rescue concept of operations right.
	Both the fire and rescue service and the RNLI, among others, are participating actively in the project, and have provided project team members as well as members of the project board. The Government have agreed that the remit of the fire and rescue service national co-ordination centre, which has been established to co-ordinate the national mobilisation of the so-called new dimension assets, can be extended to include flood rescue assets from all flood responder organisations.
	In the current spending review, we have made available up to £2 million to enhance our flood rescue capability. A strategy for the best use of that money is being developed, not just with me as the Minister, but with responder organisations such as the fire and rescue service.
	I want to make it clear, for my hon. Friend the Member for Hayes and Harlington and for all those who have spoken in support of the amendment, that we do not reject totally the idea of a statutory duty option if necessary, as Sir Michael Pitt said. Our assessment at the moment is that that duty is not clearly needed, right here and right now, although we are already doing work in that direction.
	On completion of the project, and having assessed the improved flood rescue capability, the Government will consider whether the roles and responsibilities of the organisations involved need any statutory underpinning, or whether continued co-ordination and further guidance will be sufficient. We need to let the project show what it can deliver.

Roger Williams: rose-

Huw Irranca-Davies: I want to deal with some of the details, as that might answer a few of the issues that the hon. Gentleman wants to raise.
	The roles of the fire and rescue authorities are already defined. With regard to responding to emergencies, they have specific duties in relation to fires, road traffic accidents, mass decontamination and urban search and rescue. In addition, under section 11 of the Fire and Rescue Services Act 2004, they have the power to prepare to deal with the many other emergencies that may affect their area. If it is concluded that flooding is a risk in an area, and that it has the potential for harm, the fire and rescue authority has the power to secure resources to enable it to respond. One effect of that permissive power is that some fire and rescue authorities have procured boats for the rescue of people trapped by floods.
	My hon. Friend also raised the interesting point that an amendment could be introduced later in another place. I should be pleased to discuss the matter with him and other colleagues, as well as with members of the Fire Brigades Union executive, whom I am always happy to meet. However, I am not sure that all hon. Members are aware that a power already exists, in section 9 of the 2004 Act, to direct the flood response of fire and resilience authorities. The power allows the Secretary of State, by order and following consultation, to place a duty on fire and rescue authorities to respond to particular types of emergencies. Therefore, the power that my hon. Friend may be thinking about seeking, either here or in another place, already exists.
	We already have a project under way. Sir Michael Pitt said a new power might be needed to fill a statutory gap if necessary. My point is that we already have such a power if, on completion of the project, we are minded to use it.

John McDonnell: I welcome the Minister's response, which I am finding extremely constructive. However, the power to which he refers is very specific and narrowly defined, in that it responds to a particular type of incident. We are seeking a more general and much broader duty on fire and rescue authorities to respond to incidents, but I welcome the opportunity for further discussion in advance of the Lords debate.

Huw Irranca-Davies: I think that it would be helpful to sit down and go through these matters in advance of the Lords debate, to use my hon. Friend's phrase, to see whether there is a way forward. I often describe myself as the reluctant legislator, as I do not believe in introducing new statutory requirements just for the sake of it. If a power already exists that we can exercise if we need to, I believe that we should use it. However, if it turns out that no such power exists, then he and I should talk.

John McDonnell: To clarify the matter, my proposal is designed to enable the Bill to be completely flexible, with a discretionary power allowing the Secretary of State to act without having to come back to the House to secure primary legislation.

Huw Irranca-Davies: Yes, and I am saying that we already have the necessary power. However, we should have a good look at the matter.
	The hon. Member for Upminster asked whether the flood and rescue services had the right equipment, uniforms and so on. That is an important question, and DEFRA's flood rescue national enhancement project, which involves the fire and rescue authorities, includes the flood rescue concept of operations. We did not wait for Pitt or for this Bill, as the project already under way also covers the equipment needed in various scenarios and a national asset register, as well as a gap analysis to see whether, and where, we have shortages in national capacity.
	The gaps in Cumbria were filled by proper preparation and by drawing in resources from the surrounding area. In addition, and as I said, we have already put in £2 million to address gaps and deficiencies.

Angela Watkinson: Will the Minister respond to the specific point that firefighters should not be expected to respond to flood emergencies wearing clothing that is intended to protect them from fire?

Huw Irranca-Davies: That is exactly the point that I was addressing. The project is designed to identify the gaps in the big resources such as pumps and boats, but also in those resources-uniforms and so on-that are essential to all persons encountering a flood situation.
	The hon. Lady also asked about who had overall control in an emergency. That is already very clear. In his recommendation 42, Pitt said:
	Where a Gold Command is established for severe weather events, the police, unless agreed otherwise locally, should convene and lead the multi-agency response.
	In Cumbria, therefore, police took the lead overall but, in that arrangement, the fire and rescue authority had clear responsibility for the co-ordination of rescue, including by boat, while the Ministry of Defence co-ordinated the helicopter. The fire and rescue authority will always be part of the multi-agency grouping put together under both gold and silver commands.

Roger Williams: As I see it, the problem goes beyond resources such as the pumps and boats needed for rescues, to include the running costs incurred by extra overtime and call-out pay for retained firemen. Those costs lead to extra expenditure on the part of the fire and rescue services, for which they are not resourced in any way. It is all very well to lay down duties and powers, but they have to be resourced with finance.

Huw Irranca-Davies: Indeed, but the fire and rescue services are not the only ones that need to be resourced. In Cumbria, the resources of the Ministry of Defence, the police, voluntary groups and so on also took a hit. The issue is about capability, rather than simply a statutory duty. Do we have the co-ordination and capability on the ground to respond not only to localised traumatic weather and flooding, but, as in the case of Cumbria, to situations that extend way beyond local capabilities? Is the planning and capability in place? That is exactly what the project is meant to address.
	I shall deal quickly with amendments 24 and 25, which would include fire and rescue authorities in the definition of a risk management authority and, of course, a Welsh risk management authority. I have already said that fire and rescue authorities are critical to managing floods, but that does not mean that it is appropriate to make them risk management authorities under the Bill. There is a clear reason why: the latter bodies have a key role in managing and reducing risk, rather than in addressing emergencies and recovery. They are two separate things. They all have a role to play in managing water, whether through drainage systems, watercourses, reservoirs or otherwise, but the latter bodies will be bound by a duty to act consistently with national strategy and, with the exception of water companies, local strategies. They have to play an active part in putting the strategies together, co-operating with partners and sharing information, and we would not want to put such demands on fire and rescue authorities. Similar points apply to amendments 26 and 27.
	Government amendments 31 to 34 address an issue, which my hon. Friend the Member for Newport, East raised in Committee, about the burden for local authorities in clause 19. It is important to ensure that local authorities are required only to take proportionate action. That has always been the policy, but we have agreed to clarify it. The amendments make it clear that local authorities need not ensure that they are aware of each and every flood incident, and that an investigation would be required only to the extent that it was considered necessary or appropriate. The amendments will ensure that local authorities are not unintentionally burdened.
	Finally, amendments 48 and 49 respond to the amendments that the hon. Members for Brecon and Radnorshire and for Cheltenham tabled in Committee. Our amendments would clarify that those who own or occupy land likely to be directly affected by any works under clauses 38 and 39 must be consulted. When the time comes, I shall therefore move amendments 31 to 34 and 48 and 49.
	I hope that I have dealt with all the other aspects of the debate, and I hope that in light of my comments the hon. Member for Vale of York will agree to withdraw new clause 2. I hope also that my hon. Friend the Member for Hayes and Harlington, on the basis of meeting me with some FBU members to explore his points further and to see whether we already have the provision that he looks for, will not press his amendment to a vote.

Anne McIntosh: Being mindful of our discussion, the hour and the debates yet to come, and with the proviso that we might return to our proposed change at a future date, I beg to ask leave to withdraw the clause.
	 Clause, by leave, withdrawn.

New Clause 3
	  
	Pilot schemes for adoption of private drains

'The Environment Agency must establish a pilot scheme with the aim of-
	(a) auditing all private drains and sewers;
	(b) assessing their condition;
	(c) estimating the likely cost of adopting all private drains and sewers in 2011, and
	(d) estimating the likely cost on customers' bills.'.- (Miss McIntosh.)
	 Brought up, and read the First time.

Anne McIntosh: I beg to move, That the clause be read a Second time.

Madam Deputy Speaker: With this it will be convenient to discuss the following: New clause 5- Sustainable urban drainage systems -
	'A full definition of Sustainable Urban Drainage Systems (SUDS) is Sustainable drainage systems or sustainable (urban) drainage systems: a sequence of management practices and control structures designed to drain surface water in a more sustainable fashion than some conventional techniques (may also be referred to as SuDS)..'.
	New clause 6- Ownership and maintenance of sustainable urban drainage systems -
	'It shall be stated which body has to be responsible for-
	(a) the ownership, and
	(b) maintenance of sustainable urban drainage systems.'.
	New clause 7- No automatic connection to waste water pipes for major new developments -
	'(1) There shall be no connection to waste water pipes or drains granted until-
	(a) water companies have been consulted on the capacity of the existing system to manage the extra demands from the new properties;
	(b) water companies have conducted a detailed assessment of the likely extra demand and the capacity of the existing system to handle it;
	(c) financial responsibility for building the extra infrastructure has been apportioned, and
	(d) formal planning permission has been given.'.
	New clause 8- Water companies to be statutory consultees -
	'(1) The relevant planning authority for all major new developments must consult equally-
	(a) water companies and
	(b) the Environment Agency.
	(2) The consultations must-
	(a) be in accordance with PPS 25;
	(b) establish the impact of the proposed new development on the local drainage system, and
	(c) inform the planning application process.'.
	Amendment 13, in clause 42, page 27, line 10, leave out from 'constructed' to end of line 12 and insert-
	'(b) provisions for preventing the public sewerage system from being overloaded,
	(c) provisions for preventing discharges from the public sewerage system from being in breach of-
	(i) the rights of landowners and riparian owners, and
	(ii) any statutory restrictions and consents,
	(d) provision about adoption of the drain or sewer by the sewerage undertaker,
	(e) requirement for such security as the undertaker may reasonably require for the discharge of all obligations under the agreement.
	(4) For purposes of paragraphs (b) and (c) provision must include-
	(a) reinforcement of the public sewerage system, and
	(b) connection points between the drain or sewer with the public sewerage system.'.
	Amendment 16, in page 27, line 35, at end add-
	'(8) As soon as practicable after the bringing into force of this section, the Secretary of State shall make such building regulations under section 1 of the Building Act 1984 as may be necessary for the purposes of this section.'.
	Amendment 17, in page 28, line 7, at end insert-
	'(4) At the beginning of subsection (4) of section 105A (schemes for the adoption of sewers, lateral drains and sewage disposal works) insert Subject to section 105AA.
	(5) After section 105A of the Water Industry Act 1991 insert-
	105AA Transfers of sewers and property rights
	(1) A sewerage undertaker shall not be required to make a declaration pursuant to a scheme made under section 105A in relation to-
	(a) a sewage disposal works; or
	(b) a sewer or lateral drain forming part of a sewerage system which-
	(i) incorporates one or more pumping stations, or
	(ii) drains to an outfall,
	until the undertaker has acquired all the property and rights described in subsection (2) below.
	(2) The property and rights referred to in subsection (2) above are-
	(a) all lands, easements and other rights necessary for securing, maintaining and operating the sewage disposal works, pumping stations and outfalls; and
	(b) all consents to discharge that may be required under Part III of the Water Resources Act 1991 (Control of pollution of water resources) in relation to the sewers, lateral drains, pumping stations, sewage disposal works and their associated outfalls.
	(3) The sewerage undertaker must use its best endeavours to acquire the property and rights referred to in subsection (2) above, in particular (in relation to the property and rights referred to in subsection (2)(a) by offering to enter into agreements with the owners of such property and rights for the acquisition of those property and rights on such terms as may be reasonable.
	(4) Any questions arising under subsection (3) above between the sewerage undertaker and an owner of any property or right referred to in subsection (2)(a) above over the terms on which the property or right should be acquired may be referred by either party to the Authority for determination under section 30A above.'.
	Amendment 14, in page 28, line 12, at end add-
	'(5) The requirement under Condition 2 must comply with regulations made by the Minister.'.
	Amendment 18, in page 28, line 12, at end add-
	'(5) After 1st September 1989 in subsection (7) of section 199 (Sewer maps), insert , or adopted by it under a scheme made pursuant to regulations made under section 105A,'.
	Amendment 2, in schedule 3, page 50, line 1, at end add-
	'(c) increasing the efficiency of the use made of available water.'.
	Amendment 3, in page 50, line 16, at end add-
	'(f) protecting health and safety, and
	(g) increasing the efficiency of the use made of available water.'.
	Amendment 23, in page 51, line 5, leave out 'county council' and insert
	'local planning authority (as defined in section 1(1)(b) of the Town and Country Planning Act 1990)'.
	Government amendments 53 and 54.
	Amendment 19, in page 54, line 26, at end add-
	'(4) The Minister shall ensure that provisions are in place which guarantee the cost of a new development's connection to a SUDS and sewerage system are born equally by the new households that benefit from the new connection.'.
	Government amendments 55 and 56.
	Amendment 15, in page 59, line 4, at beginning insert-
	'(1) At the end of section 1A add-
	1B New drainage systems
	(1) In making building regulations, the Secretary of State shall have regard to the requirements of section 106B of the Water Industry Act 1991.'.

Anne McIntosh: I shall make some introductory remarks before speaking specifically to our group of proposed changes, which, if the House will bear with me, range over a number of issues.
	Recommendation 10 of the Pitt report goes to the heart of this group of proposed changes and, I would argue, to the heart of the Bill's purpose and aim. In that recommendation, Pitt clearly concluded:
	The automatic right to connect surface water drainage of new developments to the sewerage system should be removed.
	I hope that this is just a semantic difference, but in Committee we had quite a debate-one might almost say a major argument-about whether the automatic right to connect related only to SUDS, whether we understand SUDS to mean sustainable urban drainage or sustainable drainage systems, and new drainage. The purpose of this group of proposed changes is to give effect to Pitt's overall aim, which is what I believe the Government intended. If we are to give legal effect to recommendation 10, we have to follow through the logic of Sir Michael Pitt's argument, and that involves sustainable drainage relating not only to existing ponds, which might relate to major developments, and highway overflows, but to major new developments. I hope that I can carry the Minister and the House with me.
	New clause 3 sets out the framework and scope for pilot schemes on the adoption of private drains. I have introduced the proposal because I understand that the Minister still cannot tell us the status of the investigations. Ofwat, as part of the agreed 2009 price review, has set aside substantial amounts of money to undertake those investigations, and I understand also that the Minister is in default by not having come forward with the guidance that is required to give legal effect to the transfer of lateral drains and sewers by 2011. The water and sewerage companies say that the guidance should be consulted on now, well before the election, whatever that may bring, so that the Government can meet the obligation to introduce the transfer from 2011.
	I am sure that the Minister, like other right hon. and hon. Members, will have received a huge amount of correspondence from the small drainage companies-not exactly the Dyno-Rods of this world, but the small family firms-undertaking repairs that are small in size but large in number. Throughout, they have vociferously argued that they have not been properly consulted on the transfer and adoption of private drains and sewers. I should like the Minister to tell us what consultation has taken place and what assurances have been given to those small family firms. The Dyno-Rods of this world will probably continue. I do not know Yorkshire Water's position on the matter, but even a major water company, such as Yorkshire Water, would be hard-pressed to undertake all the work that will be required after the transfer. It is therefore incumbent on the Minister to tell the House where we stand, because sole traders and small, family-run firms are concerned that they might be put out of business.

Martin Salter: Do I have to go back to my constituents-some 1,000 electors-on the Haddocks estate in Tilehurst, who have waited almost 10 years for legislation on the drains that they thought were in the public domain but by accident discovered were not, and tell them that the laudable objectives of the Pitt review and of this legislation could be delayed as a result of new clause 3, which requires a pilot scheme to be set up and that we take cognisance of the needs of some drainage companies over people who have been living with a nightmare for many years? What exactly is the hon. Lady trying to achieve?

Anne McIntosh: I am calling not for a delay, but for a sense of urgency. The hon. Gentleman's Government have delayed bringing forward the guidance and the investigation that is needed. Some constituents, many of whom may be small employers in their own right, will owe their livings to these small drainage companies. They are saying clearly, not only to Conservative Members, I am sure, but to those in all parties represented in this House, that they are worried that they have not been consulted on this. I want an assurance from the Minister that they will be consulted and that there will be work for them in future. I want to know what pilot schemes have been in place and why there has not been an audit, where that is the case. I agree with the hon. Gentleman that we still do not know how many kilometres there are or where these private drains and sewers are. I am not calling for a delay-I am asking the Government to speed up and reach a conclusion so that we can meet their target date of transferring by 2011.

Martin Salter: I am in no way impugning the hon. Lady's motives-if she wants to speak up for these contractors, she has every right to do so. My problem, as a constituency Member, is that I am looking at a new clause that says:
	The Environment Agency must establish a pilot scheme with the aim of...auditing all private drains and sewers.
	In my constituency, the audit has been done, and we are merely awaiting the transfer of powers. I worry that if this provision were built into the Bill, it would put another layer of delay in the way of my constituents who have been waiting for more than 10 years for their drains to be adopted.

Anne McIntosh: I think that the hon. Gentleman and I are arguing the same case. I want the Minister to confirm that the guidance is ready to go. Those in the industry-not the small contractors but the large water and sewerage companies-are saying to us that they would like to be consulted on the guidance now. The Government have a mixed record on consulting on guidance; this is their opportunity to say that the guidance is there and ready to go, but that they have had to undertake these consultations. I have seen heartbroken people, not only in my own constituency, because we are all affected by this. I can take the hon. Gentleman to see constituents who are affected by these provisions. In the constituency of my hon. Friend the Member for Beverley and Holderness (Mr. Stuart), people had no idea that they owned these drains and sewers until they flooded in 2007.

Maria Miller: Does my hon. Friend agree that the lack of consultation of these people is symptomatic of the Government's lack of detailed thinking on this entire issue? The hon. Member for Reading, West (Martin Salter) should remember that the Government promised to make these transfers in 2007. If they had taken action then by mapping out the sewerage network, perhaps they would be in a better place today.

Anne McIntosh: I entirely agree with my hon. Friend. In some areas, water companies know about this and are ready to go, but in others they are not. There are two elements involved. We need the guidance so that the industry can be consulted, and we need to reassure the smaller drainage companies that currently do this work that it is intended that they will be consulted.
	In his letter to me dated 30 December 2009, the Minister seemed to indicate that the ongoing work had resulted in further consultation, but that the regulations are not yet in a position to be published. Let me repeat my question: when will the regulations be published, and what consultation has there been on them? If these regulations are not published prior to April-May, before the general election, will that delay the coming into effect of the transfer?
	New clauses 5, 6, 7 and 8 relate to the definition and ownership of sustainable drainage. Most importantly, new clause 7 would write into the Bill that there will be an end to the automatic right to connect. It is unacceptable that major new housing developments are being built because of an arbitrary target that the Government have introduced to have a major housing programme of X million houses by X date. As a result, residents of fairly recent developments may, through no fault of their own, be flooded by sewage because it has not been possible for the water and sewerage companies to attach conditions and take the opportunity at the planning stage to ensure that the infrastructure will accept new capacity from these major new housing developments. I believe that the polluter should pay. The residents of these houses in major new developments may be affected in the event of flooding, as we saw in the floods of 2007. As we know, Madam Deputy Speaker, if sewage is coming into your home, or the Minister's home, that is polluted water, which means that the homeowner or tenant cannot return for a substantial period because the public health hazard means that it will take longer to clean up.
	New clauses 7 and 8 say that there should be no automatic right to connect. The water company should be a statutory consultee on the same legal basis that has been established with the Environment Agency, which now sets conditions. Those conditions are sometimes overlooked or overruled, and then we go on to experience flooding. In this regard, we want water companies to be treated on exactly the same basis as the Environment Agency. I would argue that new clauses 7 and 8 would go to the heart of implementing Pitt's recommendation 10 in ensuring that there is no automatic right to connect. It is unacceptable that existing customers of water companies in possibly quite recent developments should be asked to pay for any potential incapacity problems if sewage backs up and then overflows into their homes. The polluter should pay. It should be open to the water companies to say to the SUDS-approving body at the time when the planning application is sought that they can accept such conditions to reduce any potential floods. I think that the new clauses speak for themselves.
	The Local Government Association has expressed concern about what the layers of approving bodies should be. As the Minister is aware, if district councils are not included, that will have perverse consequences. We try to resolve that issue in this little group of amendments. District councils, which are usually the planning authorities in two-tier areas, should have responsibility for the approving of SUDS relating to major new housing developments. County councils should have responsibility, as at present, for SUDS relating to the overflow from highway spillages. It is important to have clarification in that regard.
	I hope that the Minister will accept, and take the opportunity to say so, that he is over-egging the amount that local authorities will save in the transfer of private sewers. Those figures are out of date. Private sewers are in private hands-they are not the responsibility of local authorities. We are also worried that because owners of private drains and sewers know that they will be transferred in 2011, there is a strong probability that their maintenance will lapse, so that when water and sewerage companies take over their ownership and maintenance there will be serious problems as regards the state of those assets, thereby imposing an unnecessary burden on taxpayers.
	In passing, I ask the Minister to clarify the implications of Government amendments 53 to 56 for the IDBs and others affected and whether, in his view, there will be any financial consequences.
	Amendment 13 is, I hope, fairly clear. In our view, any development should be sustainable. If a major housing development causes an overflow and spillage from the existing sewerage system, it is clearly not sustainable because it is leading to pollution and unacceptable flooding. It cannot be sustainable if the capacity is simply not there. If amendment 13 and our other amendments in this group are accepted, we will comply with Pitt's recommendation 10.
	The amendments cover universal build standards; the facilitation of access to and the operation of transferred sewage disposal works, pumping stations and outfalls; and the exemption from mapping of transferred sewers. Although the Bill provides that all new sewers and drains must be built to universal build standards, it allows the connection of new sewers and drains to the public sewerage network even if those standards have not been complied with. That cannot have been the Government's intention.
	Our amendments therefore suggest that adoption agreements under section 104 of the Water Industry Act 1991 should be supported by a non-performance guarantee. They further propose making it clear that adoption agreements must encompass protection of the existing public sewerage system from overloading, and thus from being a source of cost and pollution. The approval of new sewers and drains by sewerage undertakers would overlap with the functions of local authority building inspectors, so the Building Act 1984 would need to be consequentially amended so that regulations could be made to accommodate that overlap.
	Our amendments would not make express provision for ending the automatic right of connection to public sewers, but they would give water companies enabling powers to control the right to connect and hence reduce the risk of overloaded sewers, flooding and pollution.
	Clause 42 will insert into the 1991 Act a new section 106B, which relates to the future of lateral drains and sewers, to which I referred earlier. We believe that the water and sewerage companies support the use of properly constructed and maintained SUDS, and that our consequential amendments are necessary to ensure that the existing system will not be overloaded by new developments. Any concerns about that problem would be satisfied by our amendments, particularly amendment 13, in my name and that of my hon. Friend the Member for Upminster (Angela Watkinson). It sets out that adoption agreements should include provisions for protecting public sewer networks from becoming overloaded by the connection of new sewers, provisions for the reinforcement of the public sewer network if necessary, and provisions for water and sewerage companies to determine the point at which the new sewer is connected to the existing public sewer.
	The amendment would also require the agreements to include a requirement for a non-performance guarantee or security to be provided by the developer, so that it could be called upon should they fail to complete the work or to construct a sewer to the required standards. That would allow a water and sewerage company to complete or rectify the works at no cost to itself.
	The Minister might say that the Government are unable to accept the amendments because they will not enable them to meet their housing targets and because house builders will respond unfavourably. I believe that he is wrong in that regard and that if he follows the logic of our arguments, he will see that it is important to end the automatic right to connect and to recognise that water and sewerage companies should have the same legal basis as the Environment Agency. That is important not necessarily so that they can block major new developments from proceeding, but so that they can attach conditions to ensure that if there is any pollution, the developer will pass the potential costs on to the new householders. Amendment 19, to schedule 3, effectively sets that out. As I have said, it is unacceptable that through no fault of their own, existing customers of a water company should be asked to pay. Amendment 15 would make good the building regulations in that regard.
	The amendments go to the heart of the Bill. I hope that the Minister will agree that schedule 3, which deals with what will happen once a potential new drainage system or SUDS has been approved by the SUDS approval body, should be amended as we suggest so that the automatic right to connect is ended. The amendments would also allow the water and sewerage companies to become the owners of SUDS, which would be consistent with their statutory duty to drain effectively. Sustainable drainage already exists between household drains and the public sewer network, and both of those would be the responsibility of the sewerage undertakers. Ownership and operation of them by those undertakers would enable them to manage the whole network more effectively and efficiently. They have the skills and resources to carry out the work, and while the Bill was in Committee local authorities made it plain to us that they did not have that. Under the amendments, the undertakers would be funded to deliver their service efficiently through the price control mechanism. I hope that the Minister and the House will be minded to support us in our quest to have that important provision written into the Bill.

Martin Horwood: The amendments address hugely important issues. I am concerned, however, that there are real problems with new clause 3, as there were with the identical clause tabled in Committee. I agree with the hon. Member for Reading, West (Martin Salter), who is no longer in his place, that enforcing the establishment of pilot schemes and a long-winded assessment exercise could delay a move that residents in Cheltenham, and I would guess in York and elsewhere, need to happen as soon as possible to tackle a considerable cause of distress and cost to individual householders.
	We all know that the transfer of private drains and sewers needs to take place, and that it will be done at some stage. We already have an impact assessment, and Ofwat has done work to estimate the likely impact of adoption on household water bills-up to £12 per household per annum. Perhaps the hon. Member for Vale of York (Miss McIntosh) does not trust Ofwat or the impact assessment to have produced the right answer, but in that case she might not trust the Environment Agency's assessment of the pilot scheme either. I am sure that the new clause was well intentioned, and it certainly addresses an important issue, but the consequence of it could be to leave residents vulnerable to continued unexpected bills running into thousands of pounds, and to cause huge problems to individual households.
	I have some problem with new clauses 5 and 6, in that they both refer to sustainable urban drainage systems. Members who were not on the Committee will not know that we had considerable discussion on the precise definition of SUDS, and after considerable debate we established that the letter u did not stand for urban in the context of the Bill but was simply the u of sustainable.

Anne McIntosh: Indeed, the Minister responded in that debate by saying that he could not accept the definition that we want in the Bill, which applies in Scotland, because Scottish Water is not a private company. Would he be minded to change that view if Scottish Water became a private company?

Martin Horwood: I am not sure whether that intervention was addressed to me or the Minister, but anyway, the hon. Lady did not resolve the problem of what it is difficult to avoid calling a mistake in new clauses 5 and 6, namely the use of the word urban, so I cannot support them.
	New clauses 7 and 8 and amendments 13, 16, 17, 14, 18, 2 and 3 repeat proposals made in Committee, none of which were pressed to a Division. Because important discussions on insurance and planning permission are coming up, I am not going laboriously to repeat my support for, or opposition to, each proposal, but my support or opposition is broadly in line to that I offered in Committee. However, the hon. Member for Vale of York has raised a very important issue, and I make clear my support for the unambiguous ending of the automatic right to connect. I hope that that is now common to all parties.
	Amendment 23, which stands in the names of my hon. Friend the Member for Brecon and Radnorshire (Mr. Williams) and I, addresses an important aspect of planning in relation to sustainable drainage. It reflects a misunderstanding in the Bill between the respective roles of county and district councils in two-tier authority areas. County councils have very limited planning functions-they most commonly relate to things such as schools and waste management, for which they have responsibility. The recent exercise of those planning functions in Gloucestershire did not go entirely smoothly, and I am not filled with confidence when it comes to county councils getting involved in a matter such as sustainable drainage, in which they do not have a lot of planning experience.
	The risk of the current arrangements in the Bill is that developers will need to get planning permission from two different local authorities-the county council, in its lead flood-risk management role, as reflected in schedule 3, and the district council, which would have to happen anyway. That could further exacerbate the confusion of responsibilities and delay the approval process. That serious issue needs to be addressed. It is better by far in two-tier areas to default to the normal planning authority, which is the district council. I humbly submit that proposal to the consideration of the Minister and the House.
	Government amendments 53 and 54 look eminently sensible. They reflect concerns expressed by the hon. Member for Vale of York in Committee and it seems sensible to support them.
	I am sympathetic to amendment 19, which was tabled by the hon. Lady. Certainly, what she just said in support of it was correct. I am slightly puzzled by the drafting, and we might need further definition of the word new, which I could imagine being hotly contested in practice, but the proposal addresses an important issue.
	Government amendments 55 and 56 are largely technical, and I have absolutely no objection to them.
	Finally, amendment 15, which is also in the name of the hon. Lady, makes an eminently sensible link between the Bill and building regulations, which I am happy to support.

Maria Miller: I congratulate my hon. Friend the Member for Vale of York (Miss McIntosh) on moving this important group of proposals. I was not fortunate enough to be selected to serve in Committee, but I have had the opportunity to review the  Hansard reports of its proceedings in some detail. She is right that there are still far too many unanswered questions on a matter that is particularly important to my constituents in Basingstoke. I should like specifically to speak to new clauses 3, 7 and 8, and amendment 13. That is not to say that the other proposals are not important, but given the lateness of the hour and the other issues to be debated tonight, I will confine my comments to those.
	The proposals are important to all those who suffer from, and face the problem of, surface water or sewage water flooding in or around their homes, particularly when we consider the unsustainable approach that the Government have taken to house building in my area and those of other hon. Members. The Government have been ready to build houses, but they have not been ready to ensure that the services available locally can meet their needs. I experience that problem regularly in my constituency, especially in connection to river pollution, water supply and sewerage.
	On new clause 3-my hon. Friend's recommendation for pilot schemes-frankly, the Government have been dragging their feet for more than three years, which is adequate time for a much more robust analysis of the problem that will be transferred to water companies. I read the report of the debate in Committee closely, and the Government's responses were unsatisfactory. I am sure the Minister has reviewed those and come to the House today with more detail, to satiate hon. Members' questions.
	Obviously, I support the transfer of sewerage systems to the sewerage companies, but that needs to be done correctly. Like the hon. Member for Reading, West (Martin Salter), I have a number of estates in my constituency that have private networks. A number of householders are left in great difficulty when, for example, the roots of trees penetrate the sewerage pipes and create blockages, and flooding ensues. We know that there are 180,000 km of private sewers and natural drains in the country, so my constituents are not the only ones to suffer in that way.
	My hon. Friend's proposal for a pilot scheme to assess the costs involved in transferring the network to the water companies, which she made in Committee and today on Report, is absolutely right on a number of levels. First, we need to know whether water or sewerage companies can cope with the problems that they are to be given. My hon. Friend was right that there is probably very little maintenance going on at the moment, because people know that the asset will be transferred. Certainly, poor maintenance is a considerable historical problem. Secondly, customers will want to know exactly how the transfer will hit their bills.
	Thirdly and importantly, we need to know how much money the measure will free up from local authorities. My local authority does not see as its responsibility the alleviation of flooding problems when they occur. The payments to contractors, which my hon. Friend mentioned, are made either by private householders or by social housing landlords, who are often the people affected by those problems in my constituency. The question of how much money is being freed up in local authorities needs to be answered in far more detail, because we would not do anyone any favours if the transfer of the network is not done properly. As I said, the sewerage system is in poor condition. We need to ensure that any new approach is robust, and that we know what is to be transferred.
	New clause 7, which would end the automatic right to connect, and new clause 8, which would make water companies statutory consultees, are absolutely right. We need to ensure that when new housing, especially major development, is being discussed and planned there is sufficient capacity in the system to deal with the resulting sewage, and local residents need to be assured that they will not be left disadvantaged financially or in any other way.
	I have talked to water companies about this issue, and the problem is that they look at the theoretical capacity of the water system when they assess whether it is possible to link more houses to it. The problem is that many households are illicitly tapping into the sewerage system to drain their ground water, and that has created many of the problems of sewage flooding and overloading with which hon. Members are familiar. I urge my hon. Friend to ensure that water companies look not only at the theoretical capacity in their sewerage system, but at the actual capacity, and take into account the large amounts of ground water that find their way into our sewerage system, causing flooding problems for local residential areas and for sewage works trying to cope with excess capacity.
	I commend amendment 13 to the House, because it also addresses the issue of overloading of the sewerage system. We need to ensure not only that the sewerage pipes can cope with the amount of material from local residents, but that the sewage works can cope. In my constituency, our sewage works regularly cannot cope with the amount of sewage that is being pumped into it. As a result, our local river is overloaded and exceeding EU pollution levels, but the local authority does not appear to be able to do much about it, because of the lack of involvement by sewerage companies in the decision-making process on house building. That is unacceptable, because it leads to unsustainable development. I urge my hon. Friend to press her amendments to a Division, because if they were included in the Bill they would really help the Government to achieve a properly sustainable approach to sewerage and water for new developments for the first time.

Mark Todd: Hon. Members will know that I have spoken on flooding issues at various times in my parliamentary career. I wish to focus on the particular issue of private drains and the implications for floods.
	Hatton is a large village in my constituency, adjacent to the River Dove, and it flooded severely in 2000. That flood provided an object lesson in many aspects of dealing with floods. I will not go into all of them, but one critical issue related to the analysis of surface water drainage from individual properties. In many cases, householders had carried out their own works-probably innocently, as they could not have imagined that that would cause difficulties-to the front of their properties and on private driveways, which adjusted surface water drainage so that it ended up in the highway drainage system. In other instances, the topography of the village-it is very flat and close to the river-meant that the drainage system was challenged as soon as the water table rose.
	When we examine a planning application that involves the use of surface water drainage being applied by a householder, we have to ensure that that is genuinely sustainable in reasonable circumstances. There are situations in which that simply will not work. We also have to be honest with residents about the consequences of the often small works that they carry out for themselves on the sustainability of the public drainage system. When the Minister responds on this group, I would be interested to hear his thoughts on how we might empower the water and drainage businesses so that they audit, effectively and regularly, the exposure of their system to supposedly private drainage systems.
	I have another case study that has caused my staff and me a fair amount of work recently, although to my constituents' gain. In Church Gresley in my constituency, on a large housing estate mostly built in the 1990s, an observant constituent noted that he was paying for drainage and contacted his water company to say that he thought that he was draining his own property. So he was, and an audit was carried out. I arranged for the water company to test drainage systems throughout the estate, and that test discovered an erratic network-on this relatively new estate-of connections, with some houses being connected to the public system and some draining to their own systems. In both cases, there was a totally inadequate transfer of information between the developer of the estate and the water company, so that it was not aware of what it was supposed to be draining or whom they were supposed to be charging. The company refunded some residents, as allowed under the statutory powers for refunding drainage charges that should not have been charged, but it was then discovered that the entire system had not been adopted. It was therefore unsurprising that the water company did not have a proper map of the drainage system.
	I should point out that the location of the estate means that the drainage system would be tested in severe rainfall. It is at the side of a substantial hill-that area of the town slopes heavily-and knowledge of how the drainage system works might be material at certain times. One has to ask how thorough is the integration between the planning process and the functions of the developer-in this case the water and drainage company, Severn Trent, was remiss in allowing the estate to be constructed without any proper plans.
	My last local example-I have plenty of opportunities to consider these issues-is from the village of Hilton. The area in question is well established, so the remarks made about this Government giving planning consent that puts pressure on the drainage system do not apply. The houses were built many years ago and are on a private drainage system, although the residents are anxiously awaiting its transfer to Severn Trent. Fortunately the residents have not been pressed so far for repairs and other obligations, but they might be. That issue causes anxiety to individual residents, who worry about their liability for the repair of the drainage system, and also raises the issue of how genuinely separate such systems are from the public drainage network. Sometimes, consents have been granted that agree that the surface drainage works effectively in a location, when in fact it does not. In flood conditions, we soon find out where the faults are. So we need a robust testing process when such agreements are entered into at the planning stage, as well as a monitoring process that ensures that when residents carry out works-usually innocently, as I am not making any allegations-they do not prejudice the important drainage system on which a community relies.

Huw Irranca-Davies: I am tempted to say that new clause 3 and the Bill are for the people of Hatton and Hilton in the constituency of my hon. Friend the Member for South Derbyshire (Mr. Todd), and of the Haddocks estate, in the constituency of my hon. Friend the Member for Reading, West (Martin Salter), and for every Member speaking today to try to remedy some of the problems that have rightly been identified. I am never one to rise to things-I am an eternal optimist and a fairly convivial chap-but the hon. Member for Vale of York (Miss McIntosh) has tempted me to respond to the accusation that the Government are laggards. The same was said during the debate on the Marine and Coastal Access Act 2009, but we are now introducing the marine conservation zones. After two or three consultations-I cannot remember the exact number; I was involved in them all, some times as a Back Bencher when they first started, so I know its importance to constituents, as all hon. Members have said-it has fallen to me as the Minister to deal with the tricky and complex issue of the transfer of private sewers.
	I pay tribute to the work of my predecessors in getting to this stage-I shall come to some of the consultation in a moment-and bringing the provisions forward in good shape. That means that any hitches will be less likely. The scale of the transfer is unprecedented, so we need to get it right; I shall come to that point in a moment, too. I will take the criticism that we are slightly late, but I will also take the plaudits for the Government for getting the job done properly.
	I shall get straight to the meat of the amendments and new clauses, although I do not know whether I can persuade the hon. Member for Vale of York on this matter. I was trying to remember who wrote the song, Oh Lord, Please Don't Let Me Be Misunderstood, because I think that I may be misunderstood here. Nevertheless, I will do my best to explain the rationale behind my response to the new clauses and amendments.
	New clause 3 would require the Environment Agency to establish a pilot scheme, as has been mentioned, to ascertain the extent and condition of private sewers and drains, and to estimate the likely costs of the transfer to water and sewerage companies. Hon. Members have already expressed some concerns about that; I ask the House to allow me to express mine. The proposal would impose an unnecessary and a disproportionately costly new burden on the EA, as we discussed in Committee. The EA has no direct responsibility for private sewers, so the impact on it would bear no comparison to any real benefit.
	To reiterate what I said in Committee, the latest estimate from UK water industry research into the costs of a full audit to ascertain the extent and condition of private sewers is in excess of £1 billion. Even to undertake pilot schemes would be proportionately extremely expensive-and all before a single penny is spent on the cost of repairs. It would also duplicate work that is already more appropriately undertaken by water and sewerage companies and their independent economic regulator, Ofwat. The estimates were set out in the impact assessment accompanying the Government's announcement in December 2008 of their decision to proceed with the transfer.
	Moreover, the new clause is entirely unnecessary. One water and sewerage company has done some preliminary work in its area and found that, although there were more private sewers than it expected, they were also in better condition than it expected. Another experienced difficulty in getting property owners' co-operation. Pilots are not a new idea. The Government consulted on them in July 2007, and 70 per cent. of respondents rejected the case for pilots. The stakeholder steering group assisting DEFRA's review of private sewers agreed with that view. I do not accept, therefore, that pilots-well intentioned as the idea is-are likely to yield sufficiently useful information to warrant the cost and, as mentioned, the delay in bringing the benefits of transfer to householders. The cost of an audit would be better spent tackling the real problems with private sewers.
	Amendment 17 refers to the transfer of sewage treatment works alongside other assets and access rights.

Anne McIntosh: The Minister has focused on the pilot schemes, but will he address my remarks about the guidance and the publication of the guidance and the regulations? It is the mood of the House that we should proceed to transfer, but Opposition Members are getting a clear message that there has not been proper consultation on the guidance. The private contractors currently doing the work are extremely concerned about whether there will be such work in future. The industry must know what regulations it will be asked to comply with.

Huw Irranca-Davies: I agree with the intention behind the hon. Lady's comments, but not with her amendments. Let me deal directly with the issue of consultation, which we dealt with in Committee as well, and the allegation that water companies and contractors have not been consulted. Actually, they are key members of the private sewers review stakeholders steering group, and we have been working closely with them. There were consultations in 2004 and 2007-I will come to the individual contractors soon-to which water companies responded. They also worked with DEFRA in the follow-up to the consultations.
	I would like to make an interesting point about the concerns raised. I have seen letters as well. Letters have been sent to the Department-from smaller drainage contractors, family firms and so on-saying what the proposals will mean for them. I cannot say precisely what they will mean, but as I have said previously, I think that there will be opportunities, post-transfer, because the work will need to be done. The number of small contractors still operating in Scotland, which is slightly ahead of us on this, makes interesting reading, because it is comparable to the numbers that were operating before. The Scottish figures are also comparable to the numbers operating in similar city areas in England-for example, we can compare Edinburgh to a similar-sized city in England. Actually, there has not been a shake-out; they have responded. So I anticipate that there will still be a market for small operators.
	The hon. Lady rightly raised the issue of consultation on private sewers. In December 2008, we announced that the transfer would take place from 2011, and we are working to that timetable. We have to consult on the affirmative resolution regulations that she mentioned to make transfer happen, and we will do that in the next few months. I do not have a specific date, I am afraid, and we do have an election right in the middle of it, unfortunately-I say unfortunately, but I am pro-democracy of course. However, it does cause some problems with setting a specific date. The position for Wales is set out clearly in the strategic policy statement. We intend, therefore, to bring this forward in the next few months-by which I mean this side of the summer. I cannot promise that it will be this side of an election, however, because that is out of my hands.
	The concern behind amendment 18 is that sewerage undertakers should not be liable for failure to keep records of the assets that they inherit as a result of the transfer. The EA is concerned that such a blanket exemption, as set out in the amendment, could make it difficult to gather a full understanding of the impact of private sewers and lateral drains on sewerage undertakers' systems. It is the Government's intention to look carefully at that as part of the transfer. However, in any event, should any complaint about a breach of duty be made, Ministers could reasonably take into account whether a company was acting appropriately in deciding whether enforcement action might be appropriate.
	Accepting amendment 17 might limit the extent, scope and speed of transfer and the Government's regulation-making power on transfer schemes, which is subject to the affirmative resolution procedure. Following any transfer, the undertakers will have statutory access rights provided to them when laying or accessing their own infrastructure. Those rights were granted expressly by Parliament and have been considered by successive Administrations to strike the right balance between the interests of landowners and those of sewerage companies. Where they wish to obtain additional rights, they can seek to agree them with the landowners.

Anne McIntosh: I do not know whether others in the House are aware of this, but the Minister had a series of discussions between the end of the Committee stage and the Bill's remaining stages today. It would be extremely helpful, first, if he would take this opportunity to report to the House on the reassurance that he has given the water companies, so that we can have on the record the exact statement that he wished to make to them-the one that he assured them that he wished to make to them-and, secondly, if he could confirm that that is said on the basis of Pepper  v. Hart, so that if we do not press our amendments, we shall have an assurance that his statement will be justiciable and can be relied on as an indication of how the Bill is to be interpreted subsequently.

Huw Irranca-Davies: Indeed. I shall be happy to respond to that point in full. However, let me make a little bit of progress first, and then I shall turn to it directly.
	Amendment 13 specifies a number of issues that must be included in agreements for the adoption of new foul sewers and lateral drains. Amendment 14 provides for associated regulations. Although stakeholders advised us to retain adoption agreements under section 104 of the Water Industry Act 1991 as the vehicle for the adoption of new foul sewers and lateral drains by undertakers under the new mandatory regime, we do not intend to specify in primary legislation the range of details that must be covered in the agreement. That preserves the flexibility needed to deal with site-specific issues, and avoids placing undue burdens on small developers that do not currently use the adoption process. Where there is a dispute about the content of an agreement, the matter can be taken to Ofwat for determination. We think that that is the right approach to promote innovation and site flexibility.
	Amendments 15 and 16 would require new building regulations to be made as necessary for the purposes of, and taking account of, new section 106B of the 1991 Act, which provides for new mandatory construction standards for new foul sewers and lateral drains connecting to the public sewerage system, and for their automatic adoption by sewerage undertakers. I would like to reassure hon. Members that the proposals in clause 42 are not intended to require any changes to building regulations. Building regulations and building control will continue to apply to drains on a development connecting to the adoptable lateral drains and sewers, but not to the laterals and sewers themselves, which will be subject to agreement with, and control and inspection by, the water and sewerage companies. That activity will take place alongside the building control inspection process, but not overlap it. An evaluation of the relevant building regulations will start this year and will consider what new guidance might be needed on the changes that clause 42 introduces, to clarify how the building control system will work alongside them.
	The hon. Members for Vale of York and for Upminster (Angela Watkinson) also tabled new clause 7, which seeks to restrict the connection of waste water drainage from new developments to the public sewerage system by making it subject to planning approval. New clause 7 would require water and sewerage companies to be consulted before approval on the capacity of their systems to manage the extra demand. It would also seek to ensure that the responsibility for meeting the cost of creating any additional necessary infrastructure is apportioned. Sir Michael Pitt's review of the 2007 floods recommended that
	the automatic right to connect surface water drainage of new developments to the sewerage system should be removed.
	The Bill does just that. Drainage systems must be approved by the SUDS approving body-the SAB-as being in line with the national standards for drainage systems before any residual connection to the public sewer is allowed, and then only as a last resort-I keep repeating this-after SUDS have been employed to reduce the flow to the sewer. Water and sewerage companies will be statutory consultees in the SUDS approval process.
	I now turn to- [ Interruption. ] Sorry, I will come back to that.
	The hon. Members for Vale of York and for Upminster have also tabled several amendments on the definition of SUDS and drainage systems. New clause 5 seeks to insert a further definition of sustainable urban drainage systems into the Bill. We debated that issue fully in Committee, and I should like to restate our view that we see no desirability in a definition that constrains the idea of sustainable drainage to urban areas. As 2007 demonstrated, surface water flooding is both an urban and a rural issue, and SUDS can be used in both rural and urban areas, and everything in between. Therefore, the proposed amendment is more limiting.
	Amendments 2 and 3 seek to introduce the idea of water efficiency into the definition or application of SUDS. We understand the intention behind amendment 2. However, the current definition sets out what a drainage system is, whereas the amendment attempts to insert a depiction of the ideal characteristics of a drainage system. That has a consequential impact on the remainder of schedule 3, which refers to the approval of drainage systems. By inserting a reference to water efficiency, amendment 3 highlights another potential side benefit of SUDS for water use. We should all agree that we need to do more to reduce water use generally, especially in areas of water shortage-and of course, clause 36 also addresses that issue. However, I suspect that in amendments 2 and 3, hon. Members are referring to the use of rainwater harvesting as a sustainable drainage technique, which is something that I am pleased to have in my house; I have to say that it works very well and has been well worth it.
	Rainwater harvesting is indeed an acceptable SUDS technique. However, before making it a requirement of SUDS, we should understand the costs, benefits, practicalities and carbon impacts. The issue will therefore be addressed in the development of the national standards against which any proposed drainage system will be judged. I am not ruling out rainwater harvesting systems as a potentially beneficial SUDS technique-indeed, I love them-and especially not in some areas, but it is not necessary to drive that through primary legislation.
	The hon. Members for Vale of York and for Upminster have also tabled new clause 6, which would make provision to state which body has to be responsible for the ownership and maintenance of SUDS. As we debated in Committee at some length, the Bill is clear on that point. Paragraph 6 of schedule 3 already specifically places the responsibilities and duties of a SAB-a SUDS approving body-on the unitary or county authorities. Paragraph 6 also allows the Minister to appoint by order an alternative body to approve drainage systems in a specified area. The SAB would have responsibility for the approval of drainage systems in new developments and redevelopments to the national standards for sustainable drainage. The SAB is also responsible for adopting and maintaining SUDS that serve more than one property, where they have been approved.

Anne McIntosh: I am sure that the Minister will find his place and respond to my earlier queries in due course, but on that point, will the water and sewerage companies be consulted on the building standards? They are keen that they should be, so it is important that we should have that assurance.

Huw Irranca-Davies: Yes, absolutely. The hon. Lady makes a good point. I can confirm that the water and sewerage companies will indeed be consulted. Their input will be critical. I will return to the points that she made in her opening remarks that I have not already addressed, because she made quite a few.
	To return to new clause 6, adoption does not need to confer ownership, as the new clause would seem to imply, but simply a responsibility for maintenance. The maintenance duty for adopted SUDS will ensure that they continue to provide effective drainage for the properties that they serve.
	The hon. Members for Vale of York and for Upminster have also tabled amendment 19, which would require the Minister to ensure that provisions are in place to guarantee that the cost of a new development's connection to a SUDS and a sewerage system are borne equally by the new households that benefit from the new connection. I presume it is intended that the Minister would make such provisions by regulation.
	If the intention of the amendment is that the Government should find a way of funding the long-term maintenance costs of SUDS, I can reassure the House, and I can reassure the hon. Lady, as I did in Committee, that we are actively considering the issue. As the hon. Members who moved the amendment know, in Committee I also undertook to formalise arrangements with the Local Government Association to keep under review the costs falling on local authorities. That includes SUDS and the wider range of burdens. I reported earlier in the debate that my officials and officers of the Local Government Association have been meeting to take forward this commitment, and that I have written to Councillor Gary Porter, the environment chair of the LGA, proposing formal terms of reference.
	The hon. Members for Vale of York and for Upminster also tabled new clause 8, which seeks to ensure that the relevant planning authority for all major new developments consults water companies and the Environment Agency. It further requires that these consultations are in accordance with planning policy statement 25, that they establish the impact of the proposed new development on the local drainage system, and that the consultations inform the planning process. We debated that thoroughly in Committee. As the House will be aware, the Environment Agency is already a statutory consultee in England for planning applications in flood risk areas, and for all applications for major developments. These arrangements are set out in the table in article 10 of the Town and Country Planning (General Development Procedure) Order 1995, as amended.

Anne McIntosh: I am delighted that the Minister is confirming what we already know about the Environment Agency being a statutory consultee on that basis. Why would he not agree to water companies being statutory consultees on exactly the same basis, to avoid the issues that were raised by my hon. Friend the Member for Basingstoke (Mrs. Miller) and the hon. Member for South Derbyshire (Mr. Todd)?

Huw Irranca-Davies: We are trying to achieve the same end, and we debated the matter in depth in Committee. The water companies are part and parcel of the process and need to be consulted in connection with the flood risk management function, but, as was explained in detail in Committee, we do not consider it appropriate to make them the subject of the same statutory duty of consultation.
	The hon. Members for Cheltenham (Martin Horwood) and for Brecon and Radnorshire (Mr. Williams) tabled amendment 23, which seeks to amend paragraph 6 (1)(b) of schedule 3, so that if there is no unitary authority for an area, the role of the SUDS approving body would be given not to the relevant county council but to the local planning authority. Again, we debated that in Committee.
	I will not restate the whole debate, but we consider that SUDS approval and adoption responsibilities fit together, leading to robust well-designed SUDS that can be efficiently and effectively maintained. Placing these functions at the county council level fits well alongside those councils' existing responsibilities for highways maintenance. We expect many SUDS to be located in or alongside roads, especially in dense urban areas.
	More importantly, county councils will have wider responsibilities as lead local flood authorities under clause 6(7). County councils also have responsibility for surface water management planning, and on a simple geographical basis, have a much wider overview of surface water and flooding issues. Placing the SUDS approving body-the SAB-at the county, rather than the district, level will mean the SAB has the more strategic overview and expertise in determining drainage applications.
	Of course, not all drainage applications needing approval by the SUDS approving body will also require planning permission. However, where planning permission is required, we have made the SAB a statutory consultee to the planning process and we have clearly mapped out how the process would work. Finally, as I said in Committee and reiterate now, there is nothing to prevent unitary or county local authorities, in their role as SUDS approving bodies, from transferring, by agreement, their approval functions to a local planning authority. However, the SUDS approving body would retain responsibility and liability for SUDS, so accountability stays there.
	Finally, I shall deal with the Government amendments in this group and make some additional points. In Committee I agreed to consider an amendment tabled by the hon. Members for Vale of York and for Upminster which would make internal drainage boards statutory consultees to SUDS approving bodies. In response, amendment 53 provides for that to be done.
	On amendment 54, in Committee I agreed to consider an amendment tabled by my hon. Friend the Member for City of Durham (Dr. Blackman-Woods) on regulations covering the timing and procedure for applications to the SUDS approving body. As I said in Committee, it seems eminently sensible to enable the Minister to make regulations about the timing and procedure for determining applications for approval, and also that the regulations should be able to specify what should happen if the timetable is not complied with. Such a power will enable the Government to ensure that the SUDS approval process is fully in line with the timetable for determining planning applications. I therefore commend the amendment to the House.
	Finally, amendments 55 and 56 are minor technical amendments. Amendment 55 makes the drafting of the Bill internally consistent. Amendment 56 closes a small loophole in the provisions on adopting sustainable drainage systems. As the Bill stands, those parts of a drainage system located partly on and partly off a road are maintained by the SUDS approving body and the Highways Authority respectively. Both must maintain the SUDS to national standards and approved proposals.
	However, we need to be clear about arrangements to maintain, to national standards, SUDS located entirely in a publicly maintained road. This situation will be extremely rare but must be captured for completeness. Without the amendment, the road that is also an entire SUDS would be maintained to function as a road, but not as a SUDS, potentially leaving properties served by those SUDS with inadequate drainage. I hope those comments are helpful.
	I now turn to the work that has been done with stakeholders on the mandatory build standards. The water industry has provided voluntary criteria to developers for the adoption of sewers since December 1981. However, there are often no discernible benefits for the water company or developer in pursing the adoption process, and as we have heard, that results in homeowners ending up with the liability for those assets. DEFRA has been working across a range of stakeholders including, but not exclusively, the Home Builders Federation, the National House-Building Council, Ofwat, the Consumer Council for Water, the Local Government Association, Communities and Local Government and Water UK among others to provide a basis for consultation on a mandatory build standard for gravity, foul sewers and lateral drains. We will consult similarly on SUDS, and we are already engaging with stakeholders on national standards for SUDS.
	On the discussions with Water UK, I am not sure that the hon. Member for Vale of York raised any particular point, but I wrote to all members of the Public Bill Committee recording the results of the meeting. Let me quote from letter that went out on 28 January:
	We had a good discussion about the sustainable drainage provisions. I clarified the arrangements for SUDS maintenance, including the statutory duty on the SUDS Approving Body to maintain SUDS to national standards...We discussed the sewerage undertakers, listed the statutory consultees to the SUDS Approving body.

Martin Horwood: rose-

Huw Irranca-Davies: I will finish there and give way to the hon. Gentleman.

Martin Horwood: We have little time remaining, so I want to ask the Minister a question. He mentions many consultations, and there is much public concern about these issues. Does he agree that two important issues have not been discussed tonight: insurance and planning permission for houses and new developments in flood-risk areas, which are both matters of huge public concern that we should be able to debate?

Huw Irranca-Davies: Indeed. I have dealt with many of the issues and I am coming to the end of my comments. I am checking whether there are any substantive issues that I have not yet dealt with. I have dealt with internal drainage boards and with most other significant points. I would be happy to write to hon. Members who have taken part in the debate. With those words, however, I recommend the Government amendments and invite hon. Members to withdraw their amendments.

Anne McIntosh: I am extremely disappointed by the Minister's latter remarks because it was our understanding, and that of Water UK and the other companies he met, that he was going to make a statement on the record this evening that could be potentially justiciable. He has not gone as far as they would have liked, as they wanted to see our amendments written into the Bill. The Minister may have written to members of the Committee, but that does not include all the participants in the debate today, including my hon. Friend the Member for Basingstoke (Mrs. Miller) and the hon. Member for South Derbyshire (Mr. Todd). What has happened, as I understand it, does not meet the terms of the Pepper  v. Hart case, which we relied on when we were in government in the past.

Huw Irranca-Davies: I wonder whether the points that the hon. Lady raises, on which Water UK seeks clarification, relate to this particular group of amendments or to a later group.

Anne McIntosh: My understanding is both. In this group, the issue of connections is relevant. If this is a misunderstanding, the record will show that the Minister had the opportunity to comment on automatic connections. There are two issues here, although the Minister satisfied the industry on one of them when he said that water and sewerage companies will have the opportunity to be consulted on national building standards. That is clearly on the record. However, the fact that the approving body should be compelled to include the requirements of the sewerage undertaking, identified through a statutory consultee response provided by the sewerage undertakers as part of the approvals process in the final approval of any sustainable development connecting to the sewer, will not now be written into the Bill.

Huw Irranca-Davies: I think that this may be a genuine misunderstanding. If the hon. Lady seeks confirmation that water companies are statutory consultees of the SUDS approving body, I can give that confirmation. I can also confirm that they must have regard to the water companies' advice. The SUDS approving body can set conditions on approval based on that advice, but water companies have a general duty to provide, maintain and extend the public sewerage system in their areas.

Anne McIntosh: That is very helpful, but I still do not quite understand the logic of what the Minister said in responding to our new clauses and amendments. It seems that the Government are accepting internal drainage boards and the Environment Agency as statutory consultees but refusing to accept water and sewerage companies, although it is those companies that will be affected in the event of an overflow and a lack of capacity.
	I think that there is common ground between us and the Liberal Democrats on flexibility. I readily agree that county councils should be responsible for sustainable drainage systems in relation to highways. However, we seem to have reached an impasse owing to the Minister's refusal to accept that district councils are best placed to be recognised as the approving body, particularly in relation to major housing developments and sustainable drainage systems connected with them. I fear that we will experience difficulties in implementing the Bill unless the Minister changes his view.

Huw Irranca-Davies: That is, I think, a genuine point of difference. I have explained, although possibly not to the hon. Lady's satisfaction, why we consider it appropriate to ensure that the buck stops at unitary authority level, while allowing those authorities, should they wish and with agreement, to transfer some of their responsibility to lower-tier authorities. That flexibility is there, but I am adamant that the buck should stop at one particular level, in line with the spirit of Pitt.

Anne McIntosh: I think that we shall have to agree to disagree, but like other hon. Members, I want the House to be able to deal with the remaining groups of new clauses and amendments, so I beg to ask leave to withdraw the motion.
	C lause, by leave, withdrawn.

New Clause 10
	  
	Resilience of critical infrastructure

'(1) The Secretary of State may by order require utility companies to report on their critical infrastructure and their ability to withstand future floods.
	(2) The Secretary of State must lay before Parliament a copy of each report received under subsection (1).'.- (Miss McIntosh.)
	 Brought up, and read the First time.

Anne McIntosh: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: With this it will be convenient to discuss the following: new clause 11- Resilience of individual properties, households and businesses -
	'(1) The Environment Agency must submit an annual report to the Secretary of State.
	(2) In particular, the report must include information on-
	(a) the take up of flood warnings by property owners and tenants,
	(b) the take up of additional anti-flood measures on properties previously flooded before reoccupation,
	(c) any developments with insurance companies on anti-flood measures that could be adopted that would reduce the insurance premiums for properties at risk of flooding.'.
	New clause 12- Annual report from the British Standards Institute -
	'(1) The Secretary of State may by order require the British Standards Institute to submit an annual report to the Secretary of State.
	(2) In particular, the report must include information on-
	(a) the burden of proof required to obtain the kitemark for flood resistant products,
	(b) the number of kitemarks issued in that year,
	(c) the number of products which fail to meet the test of resistance which led to further flooding of any particular property.
	(3) The Secretary of State must lay before Parliament a copy of the report received under subsection (1).
	(4) A report under this section must be laid before and approved by a resolution of each House of Parliament.'.
	New clause 13- Annual report from the Climate Change Adaptation Sub Committee -
	'(1) The Secretary of State may by order require the Climate Change Adaptation Sub Committee to submit an annual report to the Secretary of State.
	(2) In particular, the report must include information on the progress towards implementing each recommendation for adapting to climate change.'.
	New clause 14- Insurance -
	'The Secretary of State must within one year of the passing of this Act bring forward regulations to ensure the insurance industry has regard to flood prevention measures in calculating premiums and charges for flood-affected customers based on the principles of equity and shared risk.'.
	New clause 15- Planning permission refusal on grounds of flood risk -
	'(1) The Secretary of State must within one year of the passing of this Act bring forward regulations to ensure that local authorities may cite flood risk as grounds for refusal of a planning application in high flood risk areas.
	(2) These regulations must not affect the right of appeal against such a refusal.'.
	New clause 19- Low cost affordable insurance -
	'(1) The Secretary of State must within one year of the passing of this Act bring forward regulations to ensure the insurance industry in consultation with the water industry provides a comprehensive, low-cost and affordable insurance scheme against the risk of flood.
	(2) The scheme in subsection (1) should be based on the principle of shared communal risk and made available to all who are unable to receive standard insurance cover.
	(3) In this section, shared communal risk means the insurance cost against flooding is shared equally amongst policyholders within the region.'.
	New clause 21- Monthly recovery reports -
	'(1) Following a major flooding event, the Secretary of State must publish monthly reports summarising the progress of the recovery phase until the recovery process is considered complete.
	(2) The reports must specify-
	(a) the number of households displaced from all or part of their homes, and
	(b) the estimated date for the completion of the recovery process.
	(3) The Minister must consult other relevant bodies before making his reports.'.
	Government amendments 30 and 35 to 41.
	Amendment 1, in schedule 1, page 34, line 18, after 'authority', insert
	'except for the maintenance or management of an asset in pursuit of its primary purpose where this does not compromise long term flood risk management.'.
	Government amendments 50 to 52.

Anne McIntosh: Let me deal first with the Government amendments. I find it difficult to understand the logic of amendments 50, 51 and 52. I do not know why, at such a late stage, amendments 50 and 51-referring respectively to conditions 1 and 2-require loss or disturbance to be the result of a reasonable exercise of powers, or why amendment 52 seeks to replace the reference to a refusal of consent with
	a decision in connection with
	consent. However, I am sure that the Minister will be able to explain.
	New clause 10 relates to the resilience of critical infrastructure. New clause 11 relates to the resilience of individual properties, households and businesses. New clause 12 sets out the basis for an annual report from the British Standards Institute, and new clause 13 sets out that there should be an annual report from the climate change adaptation sub-committee. On new clause 13, the first Pitt recommendation was;
	Given the predicted increase in the range of future extremes of weather, the Government should give priority to both adaptation and mitigation in its programmes to help society cope with climate change,
	yet we do not see anywhere in the Bill how the Government will monitor adaptation. What prevention measures is the Minister asking interested parties such as the Environment Agency to take to ensure that they meet the adaptation requirement?
	I hope that the Minister will look favourably on new clause 13, which relates to new clauses 10 and 12. It is in everyone's interests that property should become more resilient and more resistant to future floods. Surely we should have the opportunity to consider an annual report from the climate change adaptation sub-committee to the Secretary of State, which would include information on the progress made towards implementing each recommendation for adapting to climate change. Will the Minister say whether the Government are minded to do that, what the mechanism will be and why there is no mention of adaptation in the Bill in that regard?
	New clause 10 relates to the Secretary of State requiring utility companies to report on the critical infrastructure and their ability to withstand future floods. Again, in light of the Government's most recent report and some answers in response to written questions, I think that it is fair to say that we have not had the level of reporting on critical infrastructure and the audit that Pitt required. I think that there has been some delay in the Cabinet Office; it may not be DEFRA. However, it would be helpful if the Minister enlightened us as to where we are in that regard.
	New clause 11 asks for the resilience of properties, households and businesses to be reviewed annually. The report would include information on any developments with insurance companies on anti-flood measures that would be recognised by reduced premiums and excesses. Is the Minister minded to report to us on whether there has been any movement in that regard?
	In new clause 12, we are asking the British Standards Institute to set out an annual report. My understanding is, following discussions with it, that we are not asking it to do anything that it would not be capable of doing. Therefore, I hope that the Minister will agree to support the provision. We would wish to go further. If a kitemark were issued and a product proved not to meet the test of resistance, we would want the Government to allow an action to be taken against that product.
	The right hon. Member for Makerfield (Mr. McCartney) has tabled a new clause on low-cost affordable insurance. It is good that we have that discussion. He will obviously not be aware that we have had some debates on those insurance issues, but the provision goes to the heart of the concern that constituents throughout the country may have in that regard.
	As it would be courteous of me to allow others who wish to support their amendments to comment, I will leave my remarks there at this stage.

Martin Horwood: Given the limited time available, I shall speak to new clause 14, which I want to press to a Division. Insurance is a huge issue; an amendment in the name of the right hon. Member for Makerfield (Mr. McCartney) also addresses it. It is of huge public concern, and we did not have time to debate new clauses on it in Committee. It is therefore welcome that we finally have the chance to debate this critical issue.
	Let me begin by giving an example of the problem. Mr. and Mrs. Staight from the Park area of my constituency have recently had a pretty bad experience with their insurance company. It is unrelated to flooding, because their property has never flooded. In the floods of 2007, which were likely to take place once in every 100-plus years, they were untouched by flooding. However, as a result of that recent bad experience, they wanted to change their insurance company and discovered that flooding was excluded as a risk simply because of their postcode, despite the fact that their property had never flooded. With a combination of threats, from climate change to the Government's regional spatial strategy putting more and more new housing in countryside areas around the constituency, as well as the risks of increasing and unpredictable bouts of extreme weather of various different kinds, it seems wise to extend cover to families such as the Staights. Yet the approach of the insurance industry appears to be to tolerate there being exclusions the moment someone moves insurance companies. However, that is, of course, outside the remit of the voluntary agreement that the Government have already reached with the industry.
	If such exclusions become more common, that will have serious consequences. A quarter of the homes flooded in the great floods of 2007 were not covered by insurance. The average cost of a household flooded was between £23,000 and £30,000. This is clearly very serious for any family, but it is catastrophic for poorer families who cannot remotely afford to pay such sums of money. The average cost per flooded business was even higher-between £75,000 and £112,000. Most businesses are covered for flood risk-about 95 per cent. of the businesses flooded were covered by insurance-but, again, if transfers of insurance lead to flooding exclusions spreading throughout the market, more and more businesses will be excluded and will therefore be liable for these very damaging costs.

Lembit �pik: While very much agreeing with my hon. Friend's observations, does he agree that the objective of the new clause is not to bankrupt insurance companies, but to ensure that they charge reasonable rates so that the public and small businesses are not bankrupted as a result of circumstances entirely out of their control?

Martin Horwood: Typically, my hon. Friend is absolutely right. It is in the interests of insurance companies themselves to get many of the issues relating to flooding and insurance sorted out. They do not want to insure properties that are at the most extreme risk-those that repeatedly flood and where no provision has been made to defend them against flooding-but we as a society have a common interest in insuring those properties where people have made best efforts to defend them or where flood risk management of the kind we have been discussing throughout the passage of the Bill has been put in place. We also have an interest in not seeing spiralling premiums and very high excess charges, thereby effectively excluding people from flood insurance even when that is formally provided.
	Some of these cases of spiralling premiums and very high excess charges even arise when households have spent tens of thousands of pounds on flood defences for their own households. In the case of Mr. Saunders-Pope of Keynshambury road in Cheltenham, the EA has spent tens of thousands of pounds putting flood defences right at the bottom of his garden and those of his neighbours, yet still the insurance company did not see the need-until the local MP intervened-to reflect that in their premiums and excess charges. The insurance industry and the insurance market for flooding are in danger of unravelling gradually over time, and we need to address that. I hope that Conservative Members will support either this new clause or the one tabled by the right hon. Member for Makerfield, because this is a crucial issue.
	New clause 15 also addresses a very important issue-planning permission in respect of floodplains and high flood-risk areas-that I would have liked to discuss had we had time to debate things adequately, but I recognise the late hour and the fact that we voted on a similar new clause in Committee. There are clear examples-one occurred only a few days ago in Tuffley, in Gloucester city-of planning permission being given in an area that regularly floods. In response to the planning inspector's granting of the planning permission appeal, Jackie Hall, the Conservative councillor for Quedgeley and Gloucestershire county council cabinet member, said:
	This is very disappointing and does not address issues raised by residents. We simply cannot go on determining planning cases without updated legislation, which needs to reflect the events of the last few years.
	The planning inspector involved commented that the flooding of 2007 was not likely to happen again. That is wildly optimistic, especially given that there were two such flood events in the space of a month in 2007 and another quite serious one subsequently. As I have said, climate change, urbanisation and more extreme weather patterns mean that it is wildly over-optimistic to suggest that these kinds of flood events will not happen again. We need to make it crystal clear that local authorities have the right to refuse planning permission on floodplains or on otherwise defined high flood risk areas. I could have cited many other examples had I had time to do so, and there are other important issues that we sadly do not have time to discuss, but I wish to give the Minister time to respond on the issue of insurance at least.

Ian McCartney: I thank the Front Benchers for giving me the opportunity to speak. I should tell the Minister that new clause 19 is a probing provision, but in probing I wish to ensure that we make progress on the discussions that I have been trying to have with his Department since October 2008 on this matter.
	I have been engaged on issues associated with insurance and flooding since the 1980s, both as a local authority member and subsequently as a Member of Parliament. Over the past decade or more, we have seen catastrophes on a large scale. Although the flooding in my constituency has not been on such a large scale, the result for all the individuals concerned has been a 100 per cent. loss. Nine out of 10 small businesses affected by sewer water flooding never reopen their doors and families are left desperate. Once flooding has occurred, the insurance industry is able, even with the agreement that it has with the Government now, to increase the cost of insurance cover or to refuse to provide any whatsoever. New clause 19 would ensure that the water industry and the insurance industry are brought together within a year of the passing of this Bill-

Huw Irranca-Davies: I think I can do better than that. I applaud my right hon. Friend and others for pushing this issue heavily. I made the commitment in Committee that we would examine it, because we thought that there was a need to review how we provide insurance cover and so on. We shall be writing later this week to invite the following groups to a discussion on flood insurance: the National Flood Forum; the Association of British Insurers; the British Insurance Brokers Association; the Local Government Association; interested MPs; insurance and social inclusion experts from the Treasury, the Department for Communities and Local Government and the Department for Work and Pensions; and any other interested parties. We will, thus, be able to see how we can take this issue forward.

Ian McCartney: So long as I am one of those interested MPs.

Huw Irranca-Davies: Yes.

Ian McCartney: I will ensure that my remarks are kept for that first meeting then and give other hon. Members the chance to speak now. This discussion has taken less than five minutes in a debate of five and a half hours, but if at the end of it we can help tens of thousands of our fellow citizens to get out of the dire circumstances that they are in, it will have been worth waiting five and a half hours.

Huw Irranca-Davies: In the time remaining-I thank right hon. and hon. Members for keeping their contributions short-I shall try to address as many points as I can. On new clause 10, as I explained in Committee we have set up a new Cabinet Office team to ensure that critical infrastructure-for example, power stations-is resilient to all natural hazards. The Welsh Assembly Government are involved in this work.
	On new clause 11 and the requirement for the Environment Agency to report annually on flood warning, individual property measures and insurance, I explained in Committee that there is already provision in clause 18 for the EA to report more widely and for Ministers to set the time scale for and context of the report.
	We also discussed the subject of new clause 12 in Committee, and I pointed out that British Standards Institution kitemark products must undergo rigorous testing to demonstrate that they can provide effective property level flood protection, but there is the issue of having the right product in the right place for the right flood prevention. However-
	 Debate interrupted (Programme Order, 15 December 2009).
	 The Deputy Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E), That the clause be read a Second time.
	 Question negatived.
	 The Deputy Speaker then put forthwith the Questions necessary for the disposal of the business to be concluded at that time (Standing Order No. 83E).

New Clause 14
	  
	Insurance

'The Secretary of State must within one year of the passing of this Act bring forward regulations to ensure the insurance industry has regard to flood prevention measures in calculating premiums and charges for flood-affected customers based on the principles of equity and shared risk.'.- (Martin Horwood.)
	 Brought up.
	 Question put, That the clause be added to the Bill.
	 The House divided: Ayes 36, Noes 246.

Question accordingly negatived.

Clause 1
	  
	Flood and coastal erosion

Amendment made: 30, in page 1, line 12, leave out from 'waters,' to end of line 13 and insert-
	'(e ) groundwater, or
	(f) anything else (including any combination of factors).'.- (David Wright.)

Clause 19
	  
	Local authorities: investigations

Amendments made: 31, in page 13, line 27, leave out 'In the event' and insert 'On becoming aware'.
	Amendment 32, in page 13, line 27, after 'must', insert
	', to the extent that it considers it necessary or appropriate,'.
	Amendment 33, in page 13, line 32, leave out 'An authority' and insert
	'Where an authority carries out an investigation under subsection (1) it'.
	Amendment 34, in page 13, line 33, leave out 'under subsection (1)'.- (David Wright.)

Clause 28
	  
	Power to make further amendments

Amendment made: 35, in page 17, line 16, leave out paragraphs (a) and (b) and insert-
	'(a) the Welsh Ministers, where the amendment relates to-
	(i) a matter in respect of which functions may be exercised by the Welsh Ministers, the First Minister for Wales or the Counsel General to the Welsh Assembly Government, or
	(ii) a matter within the legislative competence of the National Assembly for Wales, and
	(b) the Secretary of State, for all other purposes.'.- (David Wright.)

Clause 29
	  
	Restructuring

Amendments made: 36, in page 17, line 25, leave out 'reassign' and insert 'transfer'.
	Amendment 37, in page 17, line 26, leave out 'and' and insert 'or'.
	Amendment 38, in page 17, line 27, at end insert
	'to risk management authorities or other bodies.'.
	Amendment 39, in page 17, line 33, leave out 'authorities' and insert 'bodies'.
	Amendment 40, in page 17, line 42, leave out 'risk management authorities in England' and insert
	'English risk management authorities and other bodies with responsibilities in relation to England'.
	Amendment 41, in page 18, line 1, leave out 'risk management authorities in Wales' and insert
	'Welsh risk management authorities and other bodies with responsibilities in relation to Wales'.- (David Wright.)

Clause 35
	  
	Provision of infrastructure

Amendments made: 42, in page 18, line 32, at end insert-
	'(3A) The regulations-
	(a) may make provision only in relation to projects or works that in the Minister's opinion are of a size or complexity that threatens the undertaker's ability to provide services for its customers, and
	(b) in conferring powers, must restrict them to projects or works that, in the opinion of the person exercising the power, are of a size or complexity that threatens the undertaker's ability to provide services for its customers.'.
	Amendment 43, in page 19, line 1, after 'project', insert
	', or part of a project,'.
	Amendment 44, in page 19, line 27, at end insert '(if any).'.- (David Wright.)

Clause 36
	  
	Water use: temporary bans

Amendments made: 45, in page 21, line 32, leave out 'private'.
	Amendment 46, in page 21, line 33, at end insert-
	'(c) watering plants on domestic or other non-commercial premises using a hosepipe;
	(d) cleaning a private leisure boat using a hosepipe;
	(e) filling or maintaining a domestic swimming or paddling pool;
	(f) drawing water, using a hosepipe, for domestic recreational use;
	(g) filling or maintaining a domestic pond using a hosepipe;
	(h) filling or maintaining an ornamental fountain;
	(i) cleaning walls, or windows, of domestic premises using a hosepipe;
	(j) cleaning paths or patios using a hosepipe;
	(k) cleaning other artificial outdoor surfaces using a hosepipe.'.
	Amendment 47, in page 21, line 35, at end insert ';
	(b) remove a purpose from the list in subsection (2).'.- (David Wright.)

Clause 38
	  
	Incidental flooding or coastal erosion: environment agency

Amendment made: 48, in page 24, line 11, at end insert ', and
	(d) persons who own or occupy land that, in the opinion of the Agency, is likely to be directly affected by the work.'.- (David Wright.)

Clause 39
	  
	Incidental flooding or coastal erosion: local authorities

Amendment made: 49, in page 25, line 18, at end insert ', and
	(b) other persons who own or occupy land that, in the opinion of the authority, is likely to be directly affected by the work.'.- (David Wright.)

Schedule 1
	  
	Risk management: designation of features

Amendments made: 50, in page 37, line 24, after third 'the', insert 'reasonable'.
	Amendment 51, in page 37, line 28, after third 'the', insert 'reasonable'.
	Amendment 52, in page 37, line 42, leave out 'a refusal of' and insert 'a decision in connection with'.- (David Wright.)

Schedule 3
	  
	Sustainable drainage

Amendments made: 53, in page 53, line 30, at end insert-
	'(e) an internal drainage board, if the approving body thinks that the drainage system may directly or indirectly involve the discharge of water into an ordinary watercourse (within the meaning of section 72 of the Land Drainage Act 1991) within the board's district.'.
	Amendment 54, in page 53, line 35, at end insert-
	'(5) The Minister may make regulations about timing and procedure for determination of applications for approval; and the regulations may, in particular, specify the consequences of failure to comply with them.'.
	Amendment 55, in page 56, line 33, leave out 'is therefore not' and insert 'therefore need not be'.
	Amendment 56, in page 56, line 34, at end insert ';
	(b) where a drainage system is entirely on a publicly-maintained road (and the adoption duty does not therefore apply to it).'.- (David Wright.)

Schedule 4
	  
	Reservoirs

Amendments made: 57, in page 73, line 38, at end insert-
	 'Regulatory impact assessment
	40A (1) The Minister must carry out a review of the burden on undertakers in relation to large raised reservoirs of complying with the Reservoirs Act 1975 as amended by this Schedule.
	(2) The review must be carried out at the end of the period of 12 months beginning with the operative date.
	(3) In sub-paragraph (2) the operative date means the first date on which all of the following have come into force-
	(a) section A1 of the Reservoirs Act 1975 (inserted by paragraph 2 of this Schedule), and
	(b) regulations under sections 2(2C), 2C(1)(b) and 10(2) of that Act as amended by this Schedule.
	(4) The Minister must prepare and publish a report of the review.'.
	Amendment 58, in page 73, line 40, after 'In' insert 'this Schedule, and'.- (David Wright.)
	 Third Reading

Hilary Benn: I beg to move, That the Bill be now read the Third time.
	I thank hon. Members from all parts of the House for their contribution in helping the Bill to reach this stage, following the pre-legislative scrutiny that the right hon. Member for Fylde (Mr. Jack) so ably led. The House will recognise that there are the most demanding constraints on Bills this Session because of the shortage of time, but even with them the Public Bill Committee managed to debate the Bill, the amendments, most clauses on stand part, the vast majority of new clauses and several issues that were new to the original Bill. That in itself was a real achievement.
	I am particularly grateful for the skill with which those who chaired the Committee, the hon. Member for Christchurch (Mr. Chope), my hon. Friend the Member for Carlisle (Mr. Martlew) and the hon. Member for Congleton (Ann Winterton), steered the Bill's debate. I thank also the hon. Members for Vale of York (Miss McIntosh) and for Cheltenham (Martin Horwood) for their constructive scrutiny of the Bill and the part that they and their colleagues played in bringing us to this point.
	I am also grateful for the very hard work that was carried out by the Welsh Assembly and, particularly, the Minister for Environment, Sustainability and Housing in Wales, Jane Davidson.

Nia Griffith: Does my right hon. Friend agree that this Bill has been one of the most outstanding examples of co-operation with a devolved Administration? The co-operation started at the very beginning: it was not a bolt-on; it was an integral part of the whole discussion.

Hilary Benn: I do, indeed, agree, and my hon. Friend makes an extremely powerful point. This Bill has shown what can be achieved if one enters into debate and discussion in the right spirit.
	Many organisations have also been involved in helping us as a House to get the Bill right, and I place on the record our gratitude to them. I single out the religious groups, scout groups and others, whose very strong views on the unfairness that they faced in effect created clause 43, which allows for concessionary charges to be put in place for community groups. The truth is that theirs was an extremely doughty campaign. It was well argued, they were very forceful and they had an enormous effect for one simple reason: they had a really good point about their circumstances. The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Ogmore (Huw Irranca-Davies), who had said throughout that we would find a way of sorting out the situation one way or the other, was as good as his word, and the Bill is proof of that, because it now safeguards community and religious groups against unaffordable increases in their surface water drainage charges.

Jamie Reed: On dialogue and continued dialogue, I must note that, although we are happy that the Bill, as successful as it is, has reached this stage, this is not the end of the story. The Under-Secretary of State for Environment, Food and Rural Affairs, my hon. Friend the Member for Ogmore (Huw Irranca-Davies) knows from his work in Keswick and west Cumbria that we have to maintain that effective dialogue with communities to ensure that we get not only this legislation right, but future legislation absolutely perfect.

Hilary Benn: I agree, and I pay tribute to my hon. Friend for his work in his constituency. All Members representing Cumbria have done such work in very difficult circumstances, and I shall say a word more about that a little later. The Bill demonstrates that we have listened and responded. If legislation needs fixing or sorting, our duty is to ensure that we have the means to do the job, and Parliament should respond. That is exactly what we are doing with this Bill.
	To conclude the thanks that I wanted to express, I turn to my hon. Friend the Under-Secretary. His hard work and commitment, and his open way of doing business, if I may so describe it, has won respect and friends in equal measure in all parts of the House. He has led the Bill through Committee and Report stage with considerable skill and determination, and great knowledge. Everybody involved, including me, is extremely grateful to him for the fact that we now have the Bill before us in such good shape.
	Our discussions in Committee and on Report have made a good Bill better and stronger, with significant changes having been made since it was first published. That shows that we have listened to those inside and outside the House as it has been scrutinised. I want to touch on some of those changes. First, there is the new clause agreed in Committee on building regulations and flood resistance, which amends the Building Act 1984. As the House will know, Sir Michael Pitt recommended revising the building regulations to ensure that all new or refurbished buildings in high flood-risk areas are flood-resistant or resilient. Powers in the Building Act allow regulations to be made to cover flood resilience or resistance for new buildings or for major alterations, but they do not allow similar provisions to be made for most types of minor repair work. A practical example is the replacement of flood-damaged plaster with a more resilient plaster. Extending, through this new clause, the scope for which building regulations can be made will enable us, if appropriate, to regulate so that flood resilience or resistance measures are required when a building is being repaired. That prepares the way for implementing recommendation 11 of Sir Michael Pitt's hugely influential report into the floods of the summer of 2007.
	At this stage, I would like again to place on record, on behalf of Members in all parts of the House, my thanks to Sir Michael Pitt for an outstanding report, for the way in which he went about his work, and for the fact that he did exactly what I asked him to do in the wake of the 2007 floods, which was to identify what lessons needed to be learned. As the House will know, we have not waited to get on with implementing several of his recommendations, some of which required legislation. This Bill is proof that we have listened to what he had to say and made good progress in acting on it.
	Secondly, we have the new clause that helps to tackle the problem of bad debt in the water industry, which was raised on Second Reading. The new clause was tabled after those concerns were aired following the publication of Anna Walker's final report on the review of charging for household water and sewerage services. The new clause requires the owner of a property that is occupied by persons other than the owner to ensure that details of the occupier are given to the water and sewerage company. Should they fail to do this, the owner becomes jointly and severally liable for the bill payment, along with the occupier. The provisions added to the Bill will allow water and sewerage companies to identify the bill payers who are liable and to pursue them for debt if they leave a property without having paid their bills. Ultimately, the benefit will be felt not only by the water companies but by all paying customers, who currently subsidise those who do not pay their bills by about £12 per household per year. This is therefore a very practical change.
	Today, on Report, we have agreed to add to the Bill new clause 22 on the subject of social tariffs, about which a lot of hon. Members feel very strongly. The new clause, which is, again, very practical, will ensure that Ofwat does not rule out schemes brought forward by water companies on the grounds that those schemes introduce new cross-subsidies for other customers. Such schemes could potentially give badly needed help to those who are in the severest financial difficulty. We also tabled several Government amendments, almost all of which directly responded to debate in Committee where my hon. Friend the Under-Secretary said that he would consider issues further or responded to representations from other stakeholders. They include, first, measures to make the scope of the water infrastructure provisions clearer, for example to allow for retendering or for projects to be split. Secondly, there is a measure to make the duty on local authorities to investigate flooding less burdensome, because in Committee fears were expressed about local authorities having to do a whole range of things. The position on that will be clarified. Thirdly, we have made the hosepipe ban provisions wider, adding to the two uses of them that were originally identified. Fourthly, we have made the compensation and appeals provisions more comprehensive, particularly in relation to designated assets. There is now to be a comprehensive right of appeal, which I am sure will be widely welcomed.
	We have just discussed the process for the approval of sustainable drainage systems, and we have made clearer the provisions on the protection of them once built. We have fitted together the timetables for the approval of SUDS and the granting of planning permission, and we have ensured that we protect SUDS by making it absolutely clear that if somebody digs up or affects them in the course of doing other work, they will have to repair them. Finally, we have made much more explicit the need for landowners to be consulted when risk management authorities use their new environmental powers. With those changes, the Bill will be even better.
	On Second Reading, as my hon. Friend the Member for Copeland (Mr. Reed) has just reminded the House, we all had in mind the then recent events in Cumbria and the terrible impact that they had on the people, businesses and homes of that community. For many, it will take a very long time to recover. I pay tribute to all those who have worked very hard to provide support as people recover from the terrible impact of that night, such as the local authorities, neighbours who have helped neighbours and local communities.
	The Environment Agency recently reminded us that the 2007 floods, which were where the Bill began, cost us more than £3 billion. That is a clear indication of the serious impact that flooding has and why it is right that we have taken all the steps that we have since then to protect more people. As the House will know, we have invested more money in flood defence, so more homes are protected than at the time of the 2007 floods. We have taken practical steps to provide support for property-level flood protection where it is not possible to have a flood defence scheme, and we have learned lessons about how the emergency services work. I must say that they did a pretty good job in 2007 and certainly a very good job in the recent Cumbria floods, as any Member who was there will attest.
	As the Under-Secretary, my hon. Friend the Member for Ogmore, said at the end of the Committee stage less than two weeks ago, we know that we need to be better prepared for more extreme weather in future. This is an incredibly important Bill, and it has received cross-party support and is eagerly awaited outside Westminster because it will take the further practical steps that are required to ensure that we are better prepared and protected in the years to come when large quantities of rain fall out of the sky.
	The Bill will put in place new responsibilities on upper-tier local authorities to lead in dealing with surface water flooding of the type that we saw in Hull and Sheffield in 2007. As a society, we have come to learn that if we pave, tarmac and concrete over all our towns and cities and huge amounts of rain fall, it will be difficult for the water to flow away. We are therefore saying to upper-tier and unitary authorities, You now have responsibility for bringing people together to work out where the water can flow. They must consider whether they can minimise the problem in future through work on sustainable urban drainage and through implementing the change that we have made to require planning permission if people wish to pave or tarmac over their front gardens. That is a very practical step, as is giving the Environment Agency overall responsibility.
	For all those reasons, I am confident that both this House and the other place, where the Bill will now go into the capable care of my noble Friend Lord Davies of Oldham, will want to see the Bill reach the statute book. We have made good progress so far, and this was the right Bill to bring forward now. I commend it to the House.

Nick Herbert: I thank Members on both sides of the House for their examination of the Bill and the improvements that they made. I am particularly grateful to my hon. Friend the Member for Vale of York (Miss McIntosh) for all her work on behalf of the Conservatives both in Committee and on Report, and I join the Secretary of State in paying tribute to the Minister's work. He conducted proceedings in Committee and on Report in the same constructive manner as he did those on the Marine and Coastal Access Act 2009, which is much appreciated-it facilitates the passage of better legislation. As they sit here at this late hour, I also thank Department for Environment, Food and Rural Affairs officials for their work behind the scenes, which is often unappreciated.
	There is a great deal of agreement on the Bill across the House. Eighteen months after the Pitt review, it is essential that we make the changes needed to protect people and communities from floods and their aftermath. As the Secretary of State rightly said, the recent Environment Agency report into the 2007 floods reminded us of their huge financial impact-more than £3 billion-and there were thousands of cases of personal suffering, with people losing possessions, property and, in the very worst cases, their lives. Those problems are not going to go away; indeed, there is plenty of evidence that they could get worse.
	We are all well aware that this will be a short parliamentary Session-perhaps the Secretary of State knows exactly how short, perhaps not-and we have been pleased to co-operate to help ensure that the Bill makes it on to the statute book before the general election is called. As I said on Second Reading, it is a pity that we were unable to include some important water industry measures because of the shortage of time, and we will need to return to them in the future.
	Despite the general consensus, we remain concerned about a few measures in the Bill, and we hope to work constructively to address them in the other place without impeding its passage. At the heart of the elements of the Bill relating to flooding are oversight powers given to the Environment Agency. The national strategy created under the Bill will be a comprehensive document setting out the overall approach to be taken. That is welcome, but we must guard against an overly centralising approach that leaves too little discretion to local authorities, and that does not empower them to implement the measures they consider most appropriate. The assurances given in Committee that the national strategy would not be too centralising and that it would allow for such discretion were welcome, but we would like the Government to be clearer that they are not offering hostages to fortune by refusing sensible changes that would clarify the relationship between the national and local strategies. We must also ensure that concerns about the accountability of Environment Agency decisions are addressed.
	Some issues relating to the automatic right to connect remain. Sewer flooding is one of the most unpleasant forms of flooding that people can experience. If the Bill can be improved so that incidences of that can be reduced, it should be so amended. It should also be amended so that sewerage systems that do not meet the required standards, or that risk causing flooding elsewhere, are excluded.
	The Secretary of State today added a new clause to allow social tariffs. Affordability is a significant and growing problem in the water industry, and with one in six customers complaining of unaffordable bills, it needs addressing. That is a concern on both sides of the House. We welcome the work done by Anna Walker in her review, but that package of measures needs consultation and a formal response from the Government rather than a piecemeal approach. It is important that there is a full assessment of those proposals, including proper consultation with the industry, the regulator and consumer groups.
	As I said on Second Reading, we have proposed a White Paper for the industry to set out a direction of travel and draw together the various strands of thinking currently going on, which would focus heavily on the problems of affordability. This would provide a clear strategy, and necessary certainty, for the water industry. I continue to believe that that is the right approach, enabling a holistic package of measures for water management.
	It may very well be the case that the introduction of cross-subsidies is a suitable way of dealing with the problems of affordability. After all, there is now cross-party support for action to deal with problems in relation to charging community groups for surface water drainage, as the Secretary of State pointed out. However, Ofwat has in general been working to unwind cross-subsidies, while today's new clause allows for new ones. We need further debate and clarity about the implications for all customers, and the potential effects need to be transparent. As my right hon. Friend the Member for Wokingham (Mr. Redwood) argued, with typical cogency, we are in danger of requiring very poor households to be subsidised by the only slightly less poor. Late-tabled clauses on Report are not the way to consider this issue properly.
	Hon. Members of all parties are concerned about the issue of insurance and the way in which properties can be affected by flood risk. There was insufficient time to consider properly new clause 14, tabled by the hon. Member for Cheltenham (Martin Horwood), which focused on the problem of homes that have not been flooded but have nevertheless been hit by raised insurance premiums. New clause 14 bore similarities to our new clause 11, and we are sympathetic to these concerns and happy to work with the Government and the Liberal Democrats to see how the issue can be addressed in the other place.
	This Bill was introduced in the aftermath of the Cumbrian floods, which dominated the news before Christmas. Two months on, only a handful of families are back in their homes, with more than 1,000 houses still empty. Most will not be able to return until May. It is essential that the people of Cockermouth, Workington and the surrounding area are not forgotten, as hon. Members on both sides of the House have said. We should constantly be reminded of people who remain homeless as a result of flooding, wherever it occurs, so that we are spurred to action to get them back in their homes as soon as possible, and so that we remain mindful of future risks. That is why we proposed amending the Bill, in line with the Pitt report, to introduce a requirement on the Secretary of State to give regular updates on the recovery process, and we hope that the Government will respond favourably when we raise that point again in the other place.
	We failed to reach consideration of amendments about reservoirs, and there are concerns that provisions in the Bill on inspection may be unnecessarily onerous for small reservoirs in agricultural areas and for golf courses, where there is no risk to public safety. We want to ensure that regulation is proportionate and that reservoirs that pose no risk are not caught unnecessarily. We shall return to that issue in the other place.
	As I have said, this is a much needed Bill and we support it. Members on both sides of the House agree on the importance of reducing the risks of flooding and making changes to our national and local response to incidences of flooding when, regrettably, they occur. We are committed to playing our part in enabling the passage of this legislation and I am sure that the other place, while maintaining the rigorous scrutiny that is its time-honoured and important role, will also be mindful of the need to see this Bill reach the statute book.

Martin Horwood: This Bill, if a little late and perhaps a little rushed-certainly today-is an important and much needed piece of legislation, which we continue to support. In just a few minutes, flood water has the power to instil fear in people, damage property-almost beyond belief in some cases-and cause enormous costs for households and businesses. In mercifully few cases, it can also take lives. It is therefore right that Parliament should address this issue now, and Members on both sides of the House are doing their best to ensure that the Bill reaches the statute book and is not kyboshed by a general election. I return the thanks of the Secretary of State for his and his Department's work on the Bill, and commend to him the work of the Under-Secretary of State for Environment, Food and Rural Affairs, the hon. Member for Ogmore (Huw Irranca-Davies) and the Bill team.
	The Secretary of State was right when he said that his Minister has an open attitude. It has had a practical and positive result. A series of changes have been made during the various stages of the Bill in this place, many of which were instigated by the Opposition, including the hon. Member for Vale of York (Miss McIntosh), who has made valuable contributions. That is exactly how Parliament should work, and I wish in a way that more of our constituents could see Parliament at work in such a forum and with such collaboration, instead of just the more knockabout antics at Prime Minister's Question Time.
	I shall set out some of the positive changes. The Secretary of State mentioned the new provisions on building regulations and bad debt, but there were many others. I am pleased that the Minister paid attention to our request that the Bill clearly and beyond all possible ambiguity address all forms of flooding, specifically ground water, which has caused many problems in my constituency and many others. Other points were accepted in Committee, and if they are not in the Bill, they may be reflected in specific guidance-we had many useful undertakings from him on that.
	I am particularly keen to welcome those measures which the Minister accepted that reinforced how flood defence and water management should work with nature, and not against it. For instance, we made changes to, and he accepted points on, the reinstatement of woodland as an important method of flood and water management. In a sense, it represents a change in philosophy away from always relying on hard defence to working with the landscape and nature. That is not only a more environmentally friendly approach, but a more effective and perhaps even a cheaper approach.
	We also took an important step towards landscape scale planning, again reflecting the wider importance of the natural environment. In doing so, we allowed lead local authorities to collaborate explicitly over larger areas in the creation of their flood risk management strategies. That is important because obviously floods do not follow local authority boundaries, and actions in one area can have huge implications downhill or downstream in another area. That was an important set of changes.
	Thanks to the hon. Member for Selby (Mr. Grogan), we actually won a vote against the Government in Committee. That is a rare and welcome event, and I pay tribute to him for his long record in prompting such votes-there have been too few successes, but we had one on that occasion, and it has given added importance to regional flood and coastal erosion committees in approving Environment Agency work in their regions. I think that it will be an entirely beneficial amendment.
	Then, of course, we had this enormous and important change on concessionary charging schemes or social tariffs-whatever we want to call them-which I am proud to say resulted from a Liberal Democrat amendment. Getting it on the statute book in good order and good time could have real benefits for thousands or even tens of thousands of our poorest and most vulnerable citizens, so it is an important step to have taken. As I said, I am proud that it resulted from a Liberal Democrat amendment.
	A few concerns remain, however. The continuing confusion of responsibilities at the local level has not been entirely resolved. As the hon. Member for Arundel and South Downs (Nick Herbert) pointed out, the Bill gives some drastic powers to bodies such as the EA, including in particular those in schedule 1, under which just about anything could be designated as an asset to flood risk management. After a designation, the owner-whether Network Rail, a farmer tending his crops or the owner of a private wall-would barely be able to touch their asset, let alone alter it, without seeking permission from the flood risk management authority. That power in the Bill is drastic and without qualification, although there is a right of appeal against designation. Nevertheless, our noble Friends might have to return to that in another place.
	There were two major issues that received rather less discussion than they deserved and on which it fell to the Liberal Democrats to propose real change. The first was planning permission. We were unable to press it to a vote today, although we did press it to one in Committee. I was rather disappointed not to receive Conservative support on that occasion, because it is crucial that urbanisation and its contribution to flooding should be addressed and that the current, inadequate response of PPS25 to managing flooding be sorted out. Our amendment sought to give local authorities the explicit power to refuse planning permission to new developments on the grounds of flood risk in high flood risk areas. I still think that it is an important amendment, on an issue that concerns many of our constituents, which should be returned to at a later stage.
	The other issue, which we have just about got time to discuss today, is insurance. I welcome the Minister's positive statement about how he will engage with the insurance industry on some of the issues. I would have preferred the Bill to have said that explicitly and to have included slightly firmer regulations. Again, I am disappointed that I did not receive Conservative support on that. Our noble Friends will have to- [ Interruption. ] There is a little chuntering from the Conservative Benches, but I remember widespread abstention only a matter of minutes ago on that very issue.

Daniel Rogerson: I am grateful to my hon. Friend for giving way at this late stage, as we did not have time to talk about this earlier. I hope that he agrees that the Minister might, when talking to the industry, want to look at ensuring that all payouts are made in a timely fashion. As the MP representing Boscastle, which experienced problems because some of the insurance companies were based overseas, I think that that is crucial, so if the Minister can address it when he talks about insurance, that would be useful.

Martin Horwood: My hon. Friend makes a welcome contribution and raises an important issue.
	I thank the Minister and the hon. Member for Vale of York for their important and constructive contributions to the debates throughout. Although he is not present now, I would like to give particular thanks to my hon. Friend the Member for Brecon and Radnorshire (Mr. Williams) for his wise and expert contributions. Once again, I would also like to thank Victoria White, Har Shone and Tom Jenkins for their expert advice in my office. My test for the Bill was a simple question that I put on Second Reading: will the Bill help Warden Hill? By that I meant: will it help those thousands of neighbourhoods all over the country for which we had to try to make a practical difference? After many hours of debate, I think that the answer is yes. However, by neglecting critical issues such as insurance and planning, I do not think that the Bill will help Warden Hill nearly as much as it should have. Nevertheless, it remains a positive and fast-improving piece of legislation. I am happy to offer support from the Liberal Democrat Benches for its continued passage through Parliament.

Several hon. Members: rose -

Mr. Speaker: Order. Four right hon. and hon. Members are seeking to catch my eye and we have under 13 minutes to go. Members can do the arithmetic for themselves. I would like to get everybody in.

Ian McCartney: I will take a maximum of two minutes, Mr. Speaker.
	I welcome all aspects of the Bill, particularly as one of those who originally gave evidence to Sir Michael Pitt's inquiry and who was interviewed about some of the recommendations that we wanted it to come up with. That inquiry and its recommendations were excellent. As a consequence, the Bill will be welcomed throughout the country as a major contribution towards resolving the issues that need resolving.
	Today we debated social tariffs, subsidies and cross-subsidies. The water industry is one where cross-subsidies through social tariffs are important, because all the capital investment and all the infrastructure changes that have taken place-and will continue to take place-constitute capital with a shared risk. Through their rates, poor constituents of mine subsidise, with huge sums of money, investments on the Fylde coast in Lancashire and in parts of Cumbria on the west coast, as well as other investments in other parts of the region, and quite rightly so. It is therefore important that what the Bill does should not be seen as a sop to a few people in some communities who are poor. The poor make huge contributions towards the capital infrastructure of the water industry, yet they are sometimes poorly treated, in the services that they get and the costs for those services. I welcome the Bill as striking a balance between affordability on the one hand and shared risk in capital investment on the other.
	My final point is about affordability, which also affects insurance. We simply cannot leave that elephant in the room any longer. The lives of tens of thousands of our constituents are being ruined-and they will continue to be ruined in the years to come-by an industry that cannot deal appropriately with the issues of insurance and shared risk. We need shared risk in insurance. Without that, we will not get the investment that we need to ensure that communities can be more resilient in future than they are now.

Nia Griffith: I welcome the social tariff. Earlier today I pointed out the parallel with the council tax. It is a great disappointment to me, though not a great surprise, that the Opposition Front-Bench team is showing such hostility to that clause. There are sophisticated ways of dealing with it. Graduated methods can be used. To repeat that the poor will be subsidising the very poor is not accurate. It is important to remember that there are more sophisticated methods than a blanket cut-off point. We are proud to introduce the measure, and I am glad that we have had support from the Liberal Democrats.
	As my right hon. Friend the Member for Makerfield (Mr. McCartney) said, we need to recognise the extraordinary contribution that has been made over the years because there has been no relief from water charges. A disproportionate amount of people's income has been spent on essential infrastructure projects.
	I shall speak briefly about Government amendment 54. The whole of schedule 3 is crucial because it deals with the idea that we must think about the future. Every time we build, we must think about what we are going to do with the excess surface water. One of the things that has worried me is that in some areas where there are unitary authorities, the same authority which, as the planning authority, will consider planning applications, will also comment on the flood risk and sustainable drainage systems.
	We needed Government amendment 54 to strengthen the position of the Minister and enable him to demand certain standards, introduce regulations and specify the consequences of failure to comply. That amendment is extremely important, particularly where the unitary authority is itself the applicant in a planning application. Without that ministerial intervention and check, the same authority could be acting as applicant, judge of a planning application, and the warder of flood risk.
	I join hon. Members in saying that we are proud that the Minister has put in the community halls concession and enabled groups such as scout groups and the Urdd in Wales to continue to provide a good service without having to put all their money by for additional water charges, when they had other activities planned.
	Lastly, I am very pleased that although it is a complicated procedure and will take time, the Bill tackles the adoption of private sewers. That is extremely important for many of my constituents.

David Drew: I shall be brief so that my hon. Friend the Member for Ealing, North (Stephen Pound) can get in as well.
	I was delighted to take part in the Committee stage of the Bill. I asked to serve on the Committee and was allowed to do so. Having also taken part in the pre-legislative scrutiny, I have seen the progress of the Bill from its earliest days. We know that there were many questions about whether it was needed, not necessarily about whether the timing was right. Some of us would argue that it should have been introduced sooner. With the Cave review, the Walker review and the draft Bill, which was always there and unlikely to be carried through in its totality, there were always those who would urge caution, delay and so on.
	The Government were right to introduce the Bill. Like the hon. Member for Cheltenham (Martin Horwood), I pay tribute to the Minister who took it through. The essence of good legislation is not what happens in the Committee, but what happens outside it. We had useful discussions, and as a result, the Minister listened. Although we are still in play, we have a better Bill which will, in due course, be fit for purpose. It will need to be amended and enhanced, but we knew always that.
	To my mind, the simple way to look at this is whether we have aligned better the legislative framework, the responsibility of those who have to take action, and the funding mechanisms that allow those actions to take place. I believe that we have. Some criticisms could be made, and we could have done some things differently and better; and no doubt the other place will look further into such matters. I hope, however, that their lordships will be very careful not to wreck, unduly delay or send back this Bill, because my people in Gloucestershire need to know that they are better protected than they were before the Bill started its parliamentary passage. They need to know that what happened in 2007 will not happen again-not, of course, that we can stop the floods, but we can rectify some of the things that went wrong.
	Although I was not there in person to see the beatification of my hon. Friend the Member for Selby (Mr. Grogan), I am glad of the opportunity to say before he leaves this place that he will forever be known as someone who has managed to defeat the Government and bring them to their senses on an issue that I still do not understand, but am sure is of great import, and will ever remain so.

Stephen Pound: I am not sure which great parliamentarian it was-it might even have been you, Mr. Speaker-who said that when the House is united, it is invariably wrong. May I say that tonight's business disproves that maxim? Although I will not attempt to exceed the slavish loyalty of my hon. Friend the Member for Stroud (Mr. Drew), I would like to say that we have seen the extraordinary circumstance today that there is widespread recognition both within and outside this place that we have achieved something of considerable moment.
	The hon. Member for Arundel and South Downs (Nick Herbert) said virtually the same thing. He raised some points and additional issues that will have to be considered in the other place. The responsibility of Ofwat for the individual is well delineated in the Bill, but the responsibility for community groups needs to be re-examined. Above all, however, we have produced a very good piece of legislation.
	It seems less than a year ago that my hon. Friend the Member for Weaver Vale (Mr. Hall) first raised on the Floor of the House the circumstances relating to community groups in the United Utilities area. I speak particularly with reference to clause 43. I speak of one of those dramatic occasions when we realised that over the length and breadth of this land, scout groups, church groups, sports clubs and community groups of every shade would not just be affected by the actions of some utility companies, but could be bankrupted and driven out by them. In my own area, Greenford and District scouts were affected, and an individual scout HQ was faced with a potential bill of £700 or £800 a year. That was impossible.
	From that original clarion call and stirring cry from Weaver Vale, a meeting in Portcullis House was arranged, which 74 Members of Parliament attended; that must be close to a record. We met in Nobel house last summer-a great office built on the profits of the explosives industry. There we met again my hon. Friend the Minister, who juxtaposed that explosive past with an emollient, gentle, positive and productive present. In fact, during the course of those meetings, he revealed to us that within the heart of his constituency, at the top end of the Swansea valley, is the oldest continuous scout group in the UK-Ystrad Gynlais. He won himself many friends.
	I speak from the proud position of being one of the co-chairs of the all-party parliamentary Scout Association group-a position I aspired to for many years and have now held for 13. I would particularly like to pay tribute to the Scout Association and its people, such as Dr. Stella Creasy, who was a constant source of activity and activism in raising the issue here, and Sophie Richings, a young leader from Enfield who went to all three party conferences. I was able to attend only one: I could not afford the champagne at the other-and frankly, I did not have my sandals with me, so I missed the Liberal Democrats.
	I also want to mention Derek Twine, chief executive of the Scout Association, and David Shelmerdine, who will retire this month after more than 30 years in the association. He has seen the Bill go through, thanks to the Secretary of State and the positive work, engagement, good parliamentary skills and human decency of the Minister who has been dealing with the Bill today.

Mr. Speaker: Order. It is always a pity to have to interrupt the hon. Gentleman's flow, but I must now put the Question.
	 Debate interrupted (Programme Order, 15 December 2009).
	 Mr. Speaker put forthwith the Question already proposed from the Chair (Standing Order No. 83E),That the Bill be now read the Third time.
	 Question agreed to.
	 Bill accordingly read the Third time and passed.

Business without Debate

DELEGATED LEGISLATION

Motion made, and Question put forthwith (Standing Order No. 118(6)),

Betting, Gaming and Lotteries

That the draft Gambling Act 2005 (Operating Licence Conditions) (Amendment) Regulations 2010, which were laid before this House on 15 December, be approved. -(Mrs. Hodgson.)
	 Question agreed to.
	 Motion made, and Question put forthwith (Standing Order No. 118(6)),

Public Passenger Transport

That the draft Passengers' Council (Non-Railway Functions) Order 2010, which was laid before this House on 5 January, be approved. -(Mrs. Hodgson.)
	 Question agreed to.
	 Motion made, and Question put forthwith (Standing Order No. 118(6)),

Infrastructure Planning

That the draft Infrastructure Planning (Decisions) Regulations 2010, which were laid before this House on 5 January, be approved. -(Mrs. Hodgson.)
	 The Speaker's opinion as to the decision of the Question being challenged, the Division was deferred until tomorrow.

European Union Documents

Motion made, and Question put forthwith (Standing Order No. 119(11)),

Financial Management

That this House takes note of an unnumbered explanatory memorandum from HM Treasury dated 2 December 2009 on the European Court of Auditors' 2008 Annual Report, an unnumbered Explanatory Memorandum from the Department for International Development dated 3 December 2009 on the European Court of Auditors Annual Report on the activities funded by the seventh, eighth, ninth and tenth European Development Funds, concerning the financial year 2008, European Union Document No. 12139/09 and Addenda 1 and 2 on the Protection of the financial interests of the Communities, an unnumbered Explanatory Memorandum from HM Treasury dated 18 August 2009 on the European Anti-Fraud Office's ninth activity report for the period 1 January to 31 December 2008, European Union Document No. 12668/09 and Addendum 1, Commission Report on the Annual report to the discharge authority on internal audits carried out in 2008, European Union Document No. 14998/09 and Addendum 1, a Commission Report to the European Parliament on the follow-up to 2007 Discharge Decisions (Summary)-European Parliament Resolutions, European Union Document No. 16632/09, European Court of Auditors Special Report on delegating implementing tasks to executive agencies, European Union Document No. 17588/09, Commission Report to the Council on the follow-up to 2007 Discharge Decisions (Summary)-Council recommendations; and supports the Government's promotion of measures to improve the level of assurance given on the Community budget. -(Mrs. Hodgson.)
	 The Speaker's opinion as to the decision of the Question being challenged, the Division was deferred until tomorrow.

PETITION
	  
	Planning and Development (Essex)

Bob Spink: I warmly congratulate two of my constituents, Mr. Brian Keeler and Mr. Neil Hamper. Both are doughty campaigners who have worked for their community for many years, serving people with great honour and dignity, and they have delivered a significant petition which, in bulk, will be delivered directly to the council tomorrow evening. The councillors will be held to account by the community for their decision. Residents want the plan to be rejected.
	As the petition is rather long, I shall not read it out.
	 Following is the full text of the petition:
	 [The Petition of Brian Keeler, the residents of Castle Point and others,
	 Declares that they object to the proposed development of the area between Nos. 18 to 32 High Road, Benfleet to construct a building providing 5 Retail Units at Ground Level, 22 Parking Spaces, 2 Offices, plus 12 x 2 bed flats and 2 x 1 bed flats at 1st and 2nd floor levels; that this development should be rejected because the proposed, much larger building would dominate and overlook existing properties, bring unacceptable problems including inadequate parking, fails to show where access to and from the site parking area will be, bearing in mind an existing public parking area in Adelaide Gardens, vague refuse storage area, restricted sight lines for emerging traffic from St Mary's Drive, reduction of the pavement, loss of light entering adjoining buildings and relocation of the heritage telephone kiosk and post box; further declares that this development would further spoil the Conservation Area and create unacceptable stress on the existing infrastructure, including roads, schools, rail, doctors, dentists, etc.; that for these and many other valid planning reasons this application should be rejected by the local Councillors, elected to represent their constituents, and that given the importance to the wider community of protecting this unique Conservation Area, unelected and unaccountable officers must properly and widely consult the public before permitting such developments.
	 The Petitioners therefore request that the House of Commons urges the Government to press Castle Point Borough Council, and all Councillors, to reject this planning application and to substantially protect the unique St Mary's Conservation area.
	 And the Petitioners remain, etc.]
	[P000726]

ALUMINIUM INDUSTRY

Motion made, and Question proposed, That this House do now adjourn. -(Mrs. Hodgson.)

Philip Dunne: I am grateful for the opportunity to address the House on a topic that is of significant interest in my constituency, and of wider interest to the UK economy.
	My constituency includes the town of Bridgnorth. It may surprise the House to learn that Bridgnorth is sometimes known as the aluminium capital of the country. That is because it is home to two large aluminium processing plants: Bridgnorth Aluminium, a rolling mill that makes aluminium flat-rolled coiled products including litho for the printing industry, and employs some 230 people; and Novelis, whose subsidiary has rolling mills in Bridgnorth and is the last aluminium foil producer in the UK. Its foil is used as packaging in containers and as food packaging, and has other industrial uses. It employs 300 people. Both companies are among the largest employers in my constituency, and together they represent one of the largest remaining repositories of aluminium skills in the country.
	Last September, the main supplier to Bridgnorth Aluminium-the primary smelter operated at Holyhead on Anglesey by Anglesey Aluminium-was closed. I do not intend to dwell on its demise because the subject has often been raised in the House, not least by the hon. Member for Ynys Môn (Albert Owen), who is present tonight. I shall be happy for him to contribute to the debate after my speech and before the Minister responds, if he wishes to do so. The Minister himself was intimately involved in the discussions that preceded the closure, which was a result not of his contribution, but of a failure to provide an acceptable economic package to allow energy to be supplied at a competitive price. I shall return to that shortly.
	I am aware that the Government tried to put in place a rescue package worth some £12 million a year for four years to subsidise energy costs. My purpose tonight is not to debate the failure of that package but to highlight the problems that muddled Government policy is posing to the remaining aluminium and other heavy industrial manufacturers in this country, many of which are at severe risk of going the same way.
	As you will be aware, Mr. Speaker, aluminium production is one of the most energy-intensive processes in manufacturing. As David Bloor, managing director of Anglesey Aluminium, explained to Members at a presentation in December, when describing why the plant had closed:
	Anglesey Aluminium could not afford to buy power in the UK and reach a breakeven financial position. This is because the worldwide price of aluminium does not include a cost of carbon.
	The aluminium industry in this country lost 145,000 tonnes, almost half of our primary production capacity, through that single closure and some 400 jobs were lost. Also last year, we lost almost a third of secondary aluminium production, which is production from recycled aluminium, with the closure of one of the largest secondary smelters in Cheshire. There are now only two remaining primary smelters, one at Lynemouth in Northumberland and the other in Lochaber in Scotland. Their owners have no plans to close those smelters, but the experience of production in this country in recent years and precedents elsewhere in Europe are not encouraging, partly because electricity costs in this country are some 20 per cent. higher than they are on the continent.
	Competitive energy supply is a critical feature for effective aluminium production. My proposition is that the failure of the Government to recognise that the country needs an efficient and cost-effective energy policy has led to the demise of the nuclear plant at Wylfa, with no adequate replacement to allow production to continue at Anglesey, and the same problem is likely to befall other heavy manufacturing sectors throughout the country. The Government have time and again failed to recognise that we need an effective energy policy. They are therefore putting manufacturing jobs and processes at risk.
	In addition to competitive energy markets, the industry relies on proximity to markets. That exists in the UK at the moment. We have an integrated manufacturing capability, in terms of both raw material supplies and end users, but that is in danger of breaking down. Just during the past year, Bridgnorth Aluminium, the company in my constituency, lost its largest raw material supplier at Anglesey, its only direct UK competitor, one major rolling mill engineering supplier in the south of England and its UK partner for aluminium recycling. That means that the chain of industrial activity in which it is a key part is in danger of breaking down.
	The loss of raw materials means that the company has two essential options. One is to increase imports, which are readily available. That risks carbon leakage because many of the imports will come from countries where carbon measures are less rigorous than they are in the EU or the UK. The other option is to look to invest in its own cast- house to provide production smelting facilities. It may investigate that. If it were to do so, that is an energy-intensive process, so there is a significant risk that it may not have the electricity supply on a cost-effective basis. By introducing an additional smelting process into its manufacturing regime, it may become less competitive on international markets and it may suffer additional carbon usage, because that process will generate carbon.

Adrian Bailey: I would not wish in any way to diminish the importance of the points that the hon. Gentleman has raised in the context of the industry, but does he agree that the problems that it faces underline the importance of the actions that the Government have taken to sustain the construction industry and a market for aluminium products? There is a need to keep programmes such as Building Schools for the Future going to ensure, notwithstanding the problems, that there is still a viable market for that product.

Philip Dunne: The construction industry is not a customer of either of the two plants in my constituency, but I can see that for other aluminium processors maintaining demand is very important.
	Returning to the issue of imports and the impact on the industry cluster and the supply chain, there is no doubt that if we start to lose the integrated chain of markets in this country, there will be a great risk in respect of major investment decisions for other manufacturing companies that are consumers of aluminium products. Companies that are currently thinking of investing in UK facilities in, for example, the automotive industry, which is close to the heart of the hon. Member for West Bromwich, West (Mr. Bailey), or the aerospace or packaging industries, may well look elsewhere if the raw material that they rely on from aluminium production moves abroad. There is, therefore, a longer-term risk to a much wider range of aluminium producers.
	Carbon leakage is another principal issue. The Government's climate change levy is one of the main culprits in this regard, in addition to their failure to introduce an effective energy policy over so many years. The climate change levy is a tax on energy use, not on carbon emissions. The UK climate change agreement, which was introduced in 2001, is now in its final reporting period, and I wish to say a few words about it. First, the aluminium industry has been at the forefront of achieving carbon reductions through its efforts since 1990. If we compare the carbon emissions targets to which the Government have signed up with the 1990 baseline, we see that the aluminium industry as a whole has reduced its emissions by 39 per cent. That is within 1 per cent. of the target, and it is a remarkable achievement. Yet, as a result of the climate change levy and the Government's proposals, it will be penalised for this success. The goalposts are being moved in such a way that past success is not recognised. Raising the targets on an absolute, rather than a relative, basis makes it more difficult for businesses that have already achieved reductions in carbon emissions to be able to meet the next target without further significant investment. Given the competitive position of the industry and the uncompetitive position of operating with the current energy costs in this country, it is very hard to argue for that.
	There is also the issue of the consequences of the Government's introduction in the pre-Budget report of a further element of gold-plating. The Government propose to reduce the climate change levy rebate for companies in energy-intensive industries who are participants in the climate change agreement from 80 to 65 per cent. from 2011. The Aluminium Federation is the trade body for the industry. It has estimated that its 45 member companies who participate in the climate change agreement will see a direct increase in their costs of some £4 million to £5 million a year. That cost will have to be absorbed straight off their bottom line, at a time when they are reeling from the impact of the recession and very low margins apply. This is completely unnecessary. This tax takes this country beyond the measures required under the EU emissions trading scheme. It is purely a tax revenue-raising measure, as perceived by the industry, and it penalises growth in the industry, for the reasons that I have set out. The estimated cost to the manufacturing industry of the measure announced in the pre-Budget report is some £50 million. We will have to wait to see whether the cost emerges in the Budget-if we ever have one. I urge the Minister to make representations to his colleagues that this measure is ill-founded and will merely accelerate the demise of many of the heavy manufacturing industries in this country.
	An example of this measure's ineffectiveness in tackling carbon emissions is the Government's own estimate that the introduction of this reduced relief will save only some 200,000 tonnes of carbon emissions-that works out at a cost of some £250 per tonne. No logical argument can be made that this is being introduced to reduce climate change and emissions, because of the inconsequential reduction involved; this is purely a tax-raising measure.
	The answer to this situation is to change the whole basis of levying tax on heavy industrial companies and, as my colleagues have been urging for some years, to use a carbon levy as a replacement for the climate change levy, which has the effect of raising tax and costs, without reducing carbon to the degree that it was stated to do.
	I conclude by reminding the House that the Government are failing to recognise the achievements of the aluminium industry in meeting its own carbon reduction targets. They are seeking to gold-plate these targets, raising the goalposts in excess of the EU targets; raising tax, not reducing carbon emissions; and raising those emissions through leakage overseas. Far from helping British manufacturing, the Business Secretary seems more interested in helping businesses overseas and, dare I say it, indirectly some of his friends in Russia, who have significant interests in the aluminium industry in other countries.

Albert Owen: I am grateful to the hon. Member for Ludlow (Mr. Dunne) for allowing me to speak in this important debate and I congratulate him on securing it. I declare an interest, as chair of the all-party group on the aluminium industry. The industry had a difficult 2009, not least, as he said, in my constituency with the cessation of primary smelting at Anglesey Aluminium by its parent company, Rio Tinto Alcan. That was a massive blow to the local economy and to UK manufacturing in general, because this smelting was a big contributor to the local economy and to primary smelting in Europe and the United Kingdom.
	There were a number of complex reasons for this decision; the energy issue was one of the primary concerns that the company had, but several other issues were involved, including internal matters in Rio Tinto Alcan. That international company had moved its production to other operations across the world. The global downturn affected all manufacturing-aluminium, in particular-and it was also a factor.
	The hon. Gentleman referred to the link with Wylfa, but I remind him that a new build had been on the agenda for many years under the previous Conservative Government and they aborted the nuclear programme because of complex planning issues and so on. Those had to be dealt with, but I am pleased to say, as a proud supporter of nuclear energy, that Wylfa is on the new identified list for the future. I hope that we can resolve this situation.
	The Government gave a lot of support to Anglesey Aluminium over a long period, but in the end it chose not to take the resources available to help it bridge the gap and not to take the substantial financial package that was put in place to help it. The company requested this help and was given it, but unfortunately it decided not to take it. The remaining production at Anglesey Aluminium will be the remelt business, which will employ more than 100 people, but that is a far cry from the 1,350 people who worked at Anglesey Aluminium prior to the 1980s.
	The aluminium sector faces a number of challenges, not least from competition from countries such as China. The hon. Gentleman referred to the announcement made by the Chancellor in the pre-Budget report of a cut in the climate change levy rebate, which this Government introduced, from 80 to 65 per cent., and that is a big blow for the industry at this delicate juncture. The rebate is part of an agreement whereby intensive energy users, such as the aluminium sector, have cut their emission levels severely and well. It is a success.
	Like the hon. Gentleman, I want to ask the Minister to ask his colleagues to reconsider the matter. There are other ways of meeting the European energy directive and I think that we should perhaps consider coal, oil and gas production rather than the measure that they are talking about. I wish that he would take that on board and not penalise the sector, which is reducing emissions and making environmental and economic sense.
	I shall be brief, Mr. Speaker, but it is not all doom and gloom in the industry. Demand for aluminium production is projected to double by 2020. New technologies are evolving, with stronger products that use less metal and less energy. Growth in aluminium recycling is reducing both consumption and emissions. My friends in the Aluminium Federation tell me that 75 per cent. of all aluminium ever produced is still in use today. That shows the success in recycling aluminium, which is a very important product. The Minister will be aware that both the car and aviation industries are attracted by aluminium products. The Airbus A380 is 70 per cent. aluminium.
	Let me finish, because I understand that the Minister has to reply to the debate in the time allocated. The aluminium industry is relatively young-it was founded in 1866-but the product is evolving, and will do so with continued support from the Government. I acknowledge that they have done an awful lot to help manufacturing-we see this week that manufacturing is bucking the trend and coming out of the global recession far quicker than many other sectors. I ask the Minister to take on board the important issues that the hon. Gentleman and I have raised. I ask him to reconsider the issue raised in the pre-Budget report and to give the aluminium industry and UK manufacturing the support that they deserve so that they can be in the fast lane and so that the UK can be ahead of the game.

Ian Lucas: I congratulate the hon. Member for Ludlow (Mr. Dunne) on securing the debate. I know that he is an active member of the all-party group on the aluminium industry and how much the industry means to him personally, as well as to his constituents. He told us of the two significant companies in his constituency and I am well aware of his deep knowledge of the industry. He is aware that I met members of the all-party group for an interesting and informative breakfast shortly before Christmas-doesn't time fly?-and have therefore heard some of the points that he raised this evening before in a less formal environment.
	We are, of course, discussing an extremely important industry for the United Kingdom. I know that this has been a difficult year for Bridgnorth Aluminium, with business down by 40 per cent., as I understand it, and the loss that the hon. Gentleman described of many of its key partners in the UK. That is extremely significant and important. The Government need to deal with that, and we are determined to do so.
	This country has a significant history in aluminium, starting with the smelting of aluminium ingots in the Scottish highlands. According to the Office for National Statistics, the UK aluminium industry is worth £425 million gross value added and employs 8,000 people. That means it is worth 0.3 per cent. of overall manufacturing value and employment. That is only part of the story, because the industry also plays an important role in the manufacturing supply chain with high technology industries such as aerospace, automotive and construction requiring high value and continually improving aluminium products.
	I know that the aluminium industry also forms part of the identity of many local communities. In my constituency, we have Hydro Aluminium-a company that I have visited-and, nearby, the Novelis can recycling plant at Latchford, which is the largest in Europe. I spoke earlier about the effect of the recession on Bridgnorth, and we have also heard from my hon. Friend the Member for Ynys Môn (Albert Owen) about the closure of the primary smelter at Anglesey Aluminium, and the Rogerstone rolling mill in south Wales closed down last year with the loss of close to 1,000 jobs. Many other smaller companies have also closed, and aluminium prices, which are traded at world prices on the London Metal Exchange, fell greatly, but have recovered somewhat in recent months. As with other metals, most notably steel, demand has also suffered significantly. The Government recognise the importance of aluminium to this country, not just to the economy but to the local communities in which companies are based. That is why we have taken a number of steps to help the industry at this time.
	First, it is important that we sustain demand for aluminium in the UK. That is why we have brought forward capital spending on construction, which accounts for about a quarter of the aluminium used in the UK. That policy was opposed by the Conservative party, but I know from my work in connection with the construction industry that it was greatly valued by the industry, and that the public sector work that has been undertaken has sustained the industry in what has been a difficult time. If the demand from the public sector had been taken out of the market, the pressures on the aluminium industry would not have lessened but would have increased greatly and the difficulties would have been worsened. That sustaining of the manufacturing sector by the Government, which was opposed by the Conservatives, has been an important aspect of support for the aluminium sector in the UK.
	The Government are investing in infrastructure and in the wider supply chain. We introduced the car scrappage scheme, and we know that the automotive sector is important as a large user of aluminium. Only last week, I visited a Honda plant in Swindon that has been greatly sustained by the scrappage scheme and by the investment and the fiscal stimulus made by the Government to sustain the industry.
	The second thing that the Government have done to help the aluminium industry is to fight consistently, and with some success, for it to be compensated for indirect emissions under the EU emissions trading scheme. Thirdly, we are doing all we can to secure our energy supply. We heard much about energy from the hon. Gentleman, but I must say that there is a lack of clarity about the Conservative party's policy on energy. For example, I am still unclear about the Conservatives' position on the nuclear development at Wylfa, on Ynys Môn, that my hon. Friend has mentioned. The last I recall of their position is the description of nuclear as a last resort.

Philip Dunne: I am happy to put the Minister out of his misery. My colleagues with responsibility for energy policy have made it crystal clear that we are supportive of the rebuilding of nuclear plants, particularly on sites that have been closed and that are therefore relatively easy to get through the planning process.

Ian Lucas: I am grateful that, at long last, there appears to be some clarity on this issue from the Conservative party. However, it must accept responsibility for its failures regarding the development and sustaining of the Wylfa plant, which have been described by my hon. Friend.
	The private sector is delivering important new infrastructure such as liquefied natural gas facilities, and we are backing a diverse energy mix with new nuclear power stations playing a key role alongside other low-carbon sources such as offshore and, to a limited extent, onshore wind. However, many individual Conservative Members have consistently opposed such developments in their constituencies.
	We are also making sure that the market is working properly, by encouraging reform in neighbouring EU markets and further afield. We have been pressing the European Commission to implement energy market liberalisation throughout the EU, and we warmly welcome the robust actions that it has already taken, which have included anti-trust action and infraction proceedings.
	Finally, we are helping the aluminium industry through our Real Help programme. We have put forward a range of measures to help businesses survive the recession and come through in stronger shape. Those measures include the enterprise finance guarantee, which has offered almost 7,800 loans to customers with a total value of £795 million.
	More than 110,000 companies have benefited from the Business Link health checks, and more than 160,000 companies have gained agreement to defer tax payments worth over £4.6 billion. I know from my own constituency, which is a manufacturing constituency, that that has been greatly welcomed by the manufacturing sector.
	We also have the Manufacturing Advisory Service, which offers aluminium companies hands-on practical assistance to improve their businesses, and our Train to Gain programme provides advice and subsidised training in a range of vocational areas.
	We know that a lot of activity is going on. We take the state of the aluminium sector very seriously indeed, and the hon. Gentleman asked a specific question about the climate change levy. I know that the industry has already made representations about the levy to him and to my hon. Friend. My right hon. Friend the Minister for Business, Innovation and Skills is meeting the Aluminium Federation later this week, when I am sure that the matter will be discussed further.
	I recognise of course that the past 18 months has been an extremely difficult time for the aluminium industry. In particular, the closure of Anglesey Aluminium Metal Ltd was a great blow, not just to Ynys Môn and Wales but to the UK as a whole. The sector is facing real challenges: we need to confront them together, by dealing with demand, looking at energy supply and ensuring that the sector has a sustainable manufacturing base in the UK.
	 Question put and agreed to.
	 House adjourned.